New funding from April 1st 2024

Ah, policy making by press release, my absolute favourite...

It's a shockingly short time scale. On the plus side, it's a fairly simple one to adjust for. A few forms and reports to update and some staff to notify.

Does this apply to all non-levy payers or employers with less than 50 employees only?

Probably best to wait for ultimate clarification either tomorrow via the ESFA update, or better yet via an actual funding rule/policy change.. but I would assume the same rules apply re. them having an average of 49 or fewer employees in the 365 days before the apprentice/s were recruited, based on the wording of the speech

The Government will fully fund apprenticeships in small businesses from 1st April by paying the full cost of training for anyone up to the age of 21 - reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.

Has anyone else seen/received further detail/confirmation of this as yet? We are assuming for SEM (under 50 employees) and for anyone up to age of 21, but want to see via ESFA or new version of funding rules before we apply it...

First hicup for me on this, and want to check I am right.

An apprentice who started March 2023 aged 17 is changing employer with a date 4th April 2024, to my mind the new non levy employer would still be inline to pay the 5% co-investment as at the time of the ILR start date the 5% still applied.

would that be your understanding?

Yes that's my understanding too Christina - think we must apply the rule that was in existence at the start of the apprenticeship, so if original start date was pre 01/04/24 new employer must pay 5%. May become a hard sell if/when an employer is taking on completely new starts at the same time.. 

Now we have V3 could I check that everyone's understanding is the same as mine... that this applies to ALL non levy employers, not just for SME (i.e. fewer than 50 employees)?

para 145 Apprenticeship funding rules 2023 to 2024 (publishing.service.gov.uk)

Carol Harbord Thanks, I rushed reading that and hadn't clocked that it's ALL non-levy payers, not just small (not all SMEs are "small", I think SME is basically non-levy). The original announcements just said "small", but the Version 3 guidance is saying all non-levy. I guess that means we no longer need a small employer declaration unless the apprentice is 22-24 with an EHCP, when the employer contribution waiver is still linked to them being small. I guess that also means we don't need to record SEM = 1 in the ILR unless the apprentice is 22-24 EHCP at a small employer. That's a very niche category of students!

Then you get down to some real nitty gritty details. What about levy account holders who no longer pay the levy? It's impossible for them to switch back to a non-levy account, but they never have any funds. I assume they'll still have to pay the 5% for the insufficient funds even if the student is 16-21? That's not very fair. I think I'll have to ask ESFA about that one. Paragraph 145.1 is an exemption to the 5%, but it only says "Employers who do not pay the levy". There are levy account holders who don't pay the levy, and haven't for years.

Yes good points re declaration & SEM flag Ruth & agreed re non levy paying levy account holders - please do keep us posted if you do speak to ESFA on that. 

Ref, Then you get down to some real nitty gritty details. What about levy account holders who no longer pay the levy?

I'm taking it as, if you pay the Levy and have run out of funds, you will still need to pay the 5% fee.

kind regards

Wayne

That's how it seems right now but the thing is, some of them don't pay the levy at all. They will have paid the levy at one stage, but a levy account holder and a current levy payer are not the same thing. I have asked ESFA about the SEM flag and about the unfairness of charging 5% to employers who haven't paid the levy for years. They have raised it to the technical team, so hopefully I'll get a response in the next couple of weeks.

Hi,

Based on the changes to the 5% employer contribution, does this change the age range for the Employer incentive to 16-18 year old's? 

Will employers & providers receive the £1000 for 19-21 year old's or is that not the case? Updating all my email correspondence so need to make sure I am covering everything. 

Additional Payments are still just 16-18 (or 19-24 EHCP). Paragraph 96 of the 24/25 rules 😊

We have turned our Small Employer Waiver Form into a Non-Levy 16-21 Declaration, and then created a Additional Payments & Subsidy Form. This seemed the most logical step forward!

Ruth Canham-James - have you receieved a response yet from the Technical team? I'm also hoping for some clarification about how this change affects levy account holders v current levy payers. Thanks

Helen Bryant Not yet. I don't expect a quick reply, it's a real head scratcher! It's been an odd scenario that's existed for years, but never had much of an impact so far (other than those no-longer-levy-paying employers not needing to do reservations even though they don't pay the levy, which is just a bonus).

The only solutions I can see are:

- Just leave it and accept that it's not fair.

- Scrap the co-investment for all 16-21, even current levy payers with insufficient funds.

- Create a mechanism for employers to revert to a non-levy account.

Ruth Canham-James

The only solutions I can see are:

- Just leave it and accept that it's not fair.

- Scrap the co-investment for all 16-21, even current levy payers with insufficient funds.

- Create a mechanism for employers to revert to a non-levy account.

Yep! Here's hoping it will be option 2...

Thanks Ruth Canham-James. I'm sure it's something that they've not fully thought through. It'll be interesting to see what they come back with. 

I asked the Apprenticeship Service today whether we still need to record SEM when it's not relevant to whether they are exempt from the 5%. They replied:

meaning that if the apprentice is at the age of 16-21 or 22-24 with an EHCP that is one part of the requirement met for the co-investment waver, with the other requirement being that the company must of fewer than 50 employees that will have to be recorded in the ILR as a small employer

Then pasted the rules that clearly say the other requirement is actually "Employers who do not pay the levy" 🙄 I'm not sure why I bother. They also said we should return SEM even if it's not relevant because of age. I've replied and copied in the ESFA service desk to ask why we need to report SEM if it's not relevant to co-investment exemption.

Ruth Canham-James

Wow...  to be that muddled over what the rules clearly state!

The SEM flag thing makes no sense.

Reason Required

To establish employer eligibility for apprenticeship funding

We've never returned it unless the employer and apprentice combination was eligible to have co-investment waived. 

Why would it be returned in circumstances where it does precisely nothing to establish employer eligibility for funding? 

Sorry - I know you've said this, but just repeating it to show how nonsensical it is.

I'll try asking them myself: see if I get a different answer.

It gets better, the same person just doubled down on the exemption applying to small employers:

We continue to support SMEs recruit the next generation of talent by paying 95% of their training costs, and we pay 100% of the cost for the smallest employers (those with fewer than 50 staff) when they take on young apprentices. 

Firstly, a sales pitch, then again with the small employer.

But actually, based on the "purpose" of the SEM field, I think we can safely argue with any auditor that it is not required if it's not relevant to eligibility. I'm sorry I asked the question, but I'm hoping it will have set someone straight on their understanding of the new rules before they do some damage to a less confident provider.

Ruth Canham-James

I've changed my mind about asking them. I don't want to go around in circles about this

Absolutely agree about the purpose of the SEM and what to do at audit. I don't think we've ever had a query about us NOT returning it for learners who were 25+, so it shouldn't be an issue now given it is equally irrelevant to determining eligibility for funding.

I've seen this mentioned before by an auditor, I'm sure... I'm also sure I said that recording SEM for over 18s was silly/pointless.

The thing about asking though is, whilst it might seem pointless, if there is a larger number of people querying it, it's more likely to get looked at by someone higher up...

I'm a little late to the party.. but I attended an Apprenticeship PDSAT training session through EducationScape with Karl Bentley, who told us to use PDSAT to ensure that we haven't recorded SEM where an apprentice is ineligible due to their age, as it's unnecessary.

We've always taken this approach anyway and have never been queried. I think I'll be sticking with that personally.

Connor Goulding

Not that late! I've still not had an answer from the ESFA, other than it being passed to their policy team so you're doing better than them!

That is very helpful, thank you.

Ruth Canham-James Connor Goulding Steve Hewitt

I've just received a reply from the Specialist support team at the App service helpdesk and they have said the opposite of what your helpdesk person did regarding the need to return the SEM:

The Specialist Support team have been in touch today to let us know:
 
For the 16-21 year old cohort, you no longer need to record the SEM code. We are currently in the process of updating the Technical Funding Guide so that this aligns with the recent policy change.

An updated Tech funding guide would be nice given the "current" one is "from 2020" and last updated in May 2021!

The latest response about levy account holders who don't pay the levy:

We are aware that there may be instances that an employer has previously been flagged as being a 'levy-payer' but hasn't paid any levy for several years (due to their paybill being less than £3m). We are looking into these scenarios; in the meantime should you have any cases then please contact us the first instance.

I am looking forward to someone getting the first case to see what they do.

Can I check this situation as I'm now very confused!

Learner aged 21 years and 7 months started on 25th April 2024 and co-investment report from the period end reports says co-investment is due 

Is it only learners aged up to 21, so not already 21, or is the co-investment report wrong? I keep changing my mind on what the rules actually say!

Pauline Elliott

I believe the answer to your query is here:

https://www.gov.uk/government/publications/esfa-update-27-march-2024/esfa-update-further-education-27-march-2024

...providers will continue to receive monthly payments representing 95% of the agreed price for training and assessment until June, when backdated payments for April and May for the 5% balance of funding will be made.

So yes, co-investment report is wrong.