Launch of apprenticeship levy transfer limited to just one receiving employer

Employers who are gearing up to transfer apprenticeship levy funds to other organisations from next month will only be allowed to handover the cash to one other company, the government has confirmed.

From May, large employers who pay the levy will for the first time be allowed to transfer up to 10 per cent of their annual funds to other organisations.

The change will enable large organisations with unspent levy funding to support smaller employers in their supply chain to recruit apprenticeships.

However, the Education and Skills Funding Agency has announced that the transfer can only be made to a single company initially, and not spread across multiple employers.

“For the first phase, employers can transfer up to 10 per cent of their annual funds to one other employer,” a government update said.

“The number of employers they can make a transfer to will increase over time and after user feedback from the first phase.”

It added that levy-paying employers who use the apprenticeship service will be able to see their transfer allowance at the end of April, and the transfer can then take place from May.

The number of employers they can make a transfer to will increase over time

The receiving organisation will be able to start adding apprentice commitments from May, and for these new commitments, training providers can then be paid from June.

The Association of Employment and Learning Providers predicts that this transfer restriction will change over time.

“We understand that this restriction of transferring to only one rather than multiple employers is a short-term restriction and hopefully from the new academic year [August 2018] it will be relaxed,” said the association’s chief policy officer Simon Ashworth.

“Small detail, but important when supporting and helping levy payers plan for their spending.”

Government guidance published in February explained that there are no restrictions on who employers can transfer funds to, except that they have to be registered on the apprenticeship service.

The ESFA advised those transferring the funds to be aware of “the funding rules around transferring apprenticeship funds, which will be published at a later date”.

Once a transfer is made, it can’t be refunded “to the sending employer”.

The intention to allow levy payers to transfer funds was announced in the Department for Education’s apprenticeship funding policy guide in October 2016, and later featured in the Conservatives’ general election manifesto.

Levy-paying employers who want to transfer funds can find companies who want money in a number of ways.

For example, they can “work with an employer in your supply chain”, “get in touch with employers in your industry”, “get in touch with an Apprenticeship Training Agency”, or work with “regional partners”.

The levy is currently paid by large employers with an annual payroll of at least £3 million, and is set at 0.5 per cent of gross annual payroll, less at £15,000 allowance.

It’s expected to raise £2.5 billion a year by 2020, which can only currently be spent on apprenticeship training.