What is Co-Funding ?
Government co-funding compliments the Apprenticeship Levy scheme in two ways.
First, if you are an employer who has an annual payroll of less than £3m a year, you will not pay the Apprenticeship Levy. So co-funding replaces the Levy for non-levied employers. Through co-funding, government ensures that non-levied employers continue to have access to funding, enabling your appointed training provider use apprenticeships to train your staff. Payments will be 90% of the apprenticeship value, and, as the employer, you have to only pay 10%.
Additionally, if you are a levy-paying employer and want to train more apprentices than can be directly funded from your Apprenticeship Service levy account, Government will pick up 90% of the cost of training the additional apprentices and ask you to only contribute 10%.
In either case – levy-paying employer or not – government co-funding can significantly increase the number of staff that you can train whilst radically reducing the cost.
Co-Funding for SMEs
If you are not a levy-paying employer, accessing co-funding is relatively straightforward. First you need a training provider to work with – like the Apprenticeship College (LCoAT) – who can walk you through the steps you need to take. Here is an example of how it works.
- You agree which apprenticeships you want to use to train your staff.
- Each apprenticeship has what is known as a ‘band value’ – sometimes referred to as the ‘recovery value’.
- Government will pay the provider (in this case LCoAT) 90% of the band value.
- LCoAT will invoice you, as the employer, for the 10% contribution towards the apprenticeship training that you must make.
In this case the Team Leadership and Supervision apprenticeship has a band value of £5,000. You pay £500 and Government pays £4,500.
Payments are profiled/invoiced monthly over the duration of the apprenticeship. 20% of the total is held back until the apprentice has sat their End Point Assessment (EPA).
Co-Funding for Levy Payers
If you are a levy-paying employer then the full 100% cost of the apprenticeship training you agree with us can be paid directly from the funds in your Apprenticeship Service Account (ASA). (See our Levy Recovery page for further explanation). But there are circumstances under which your organisation will also be able to access co-funding:
- You want to train more staff than the Levy will fund
- Your ASA levy account has a negative value at any given point
Either way, once your Levy funds have been fully committed Government will step in with additional co-funding at 90% of any Levy shortfall, leaving you as the employer to contribute the remaining 10%.
With care L&D planning you can create apprenticeship programmes that use co-funding to fund higher value apprenticeships whilst you use your levy fund to support larger volume skills training across your organisation.