11th August 2020
When the Apprenticeship Levy funding model was first introduced in 2017 by the Education and Skills Funding Agency (ESFA), large employers (those with an annual payroll of £3,000,000 and above) and training providers alike had to come to terms with a new way of managing the funding that would train up Apprentices, both those new to the business and employees in existing roles. The natural evolution of this was implemented in January 2020, when smaller, non-levy employers were also encouraged to start using the Digital Apprenticeship Service (DAS) to access ESFA funding. Here at InterLearn, we work with employers of all sizes to help support, train and develop their employees, the funding of which is managed through DAS.
Employers with a payroll in excess of £3 million per year are eligible to pay the levy. The levy is charged at a rate of 0.5% of the employer’s annual pay bill and is paid directly to HM Revenue and Customs through their payroll. The levy allowance operates on a monthly basis and accumulates throughout the year. Once an employer’s funds have been fully utilised, the ESFA will directly fund further Apprenticeships by way of a 95% contribution.
Employers access their available funding through the Digital Apprenticeship Service (DAS). This funding is then used to pay for training and assessment of apprenticeships in England.
The levy applies to employers across the UK, however, apprenticeships are a devolved policy. This means that each of the UK nations manages their own apprenticeship programmes, including how funding is spent on apprenticeship training. Separate arrangements are in place for Scotland, Wales and Northern Ireland. Should an employee reside in Scotland, Wales or Northern Ireland but complete a minimum of 50% of their work within England, that would be fundable via the English model. InterLearn currently only delivers Apprenticeships in England.
Funds within an employer’s DAS account will expire after 24 months unless they are spent on apprenticeship training. The account works on a first-in, first-out basis, through either use or expiration. Whenever a payment is taken from your DAS account it will automatically use the funds entered first. You will be notified before any funds expire allowing you to maximise their use, either by spending it on apprenticeship training, or transferring up to 25% of it to other employers.
You will need to register to use the apprenticeship service. Ultimately, the funding available via your DAS account is finite so it’s important that the right people in your company have the right access and permission levels to manage this budget. InterLearn can manage your DAS account on your behalf but we find our most engaged employers also take an active part in managing their account, it is your funding after all. From the account, you are able to authorise new Apprentices, pause and stop existing ones amongst other things.
Functional Skills (Maths, English and in some Standards, ICT) are mandatory components of any Apprenticeship. These are funded directly from the ESFA and do not affect the funding in your DAS account.
Since January 2020, smaller, non-levy paying employers (i.e. those with a payroll of less than £3,000,000 per year), have also been encouraged to use the Digital Apprenticeship Service. In principle, it works exactly the same as described above but non-levy paying employers do not pay in to the funding pot; they access funding direct from the ESFA. Whilst initially this has been optional (providers still have procured contracts with the ESFA), from March 2021, the DAS account route will be mandatory for all.
To help stimulate the economy, the ESFA has introduced an incentive scheme to encourage employers to recruit an Apprentice. To be eligible, the Apprentice must:
The incentives can be up to £2,000 for 16-24 year olds or £1,500 for 25 and over. Apprentices must be employed and in learning on their Apprenticeship at days 90 and 365 to be entitled to the full incentive amount.
We have kept this FAQ limited and realise there may well be a lot more questions you have not only about the Digital Apprenticeship Service but about Apprenticeships in general. Please contact a member of our sales team if you would like more information by calling 01527 407140 or visit www.interlearn.co.uk and complete an enquiry form.
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