The Education and Skills Funding Agency (ESFA) has said it is extending apprenticeship non-levy contracts for 12 months “to provide stability while decisions about the future of the non-levy system are made”.
In its weekly update to providers, ESFA said contracts will be extended from 1 April 2019 to 31 March 2020.
The funding agency also said there will be no growth funding available for non-levy apprenticeships during the next financial year, unless “unless significant additional budget becomes available”. The funding body also confirmed that it will stop funding over-delivery.
Large companies with a payroll of over £3 million pay towards the apprenticeship levy, and can access the sum of the funding they have contributed through an online account to spend on apprenticeships. Smaller non-levy paying companies must contribute 10 per cent of the costs of training an apprentice with the rest being paid for by the government through the apprenticeships budget, which is largely funded by levy contributions.
Apprenticeships budget 'running short'
Writing for Tes last month, the chief executive of the Association of Employment and Learning Providers Mark Dawe said despite the total number of apprenticeship starts being down by a quarter compared with two years ago, the apprenticeship budget was “running short”.
Mr Dawe wrote: “The levy is being used up by large employers because of the cumulative effect of funding carry-in learners and new starts each year. The government has also badly miscalculated how much is being consumed by fewer but much more costly apprenticeships at the higher levels.”
Speaking to Tes, Mr Dawe the ESFA was pinning its hopes on significant additional budget becoming available. "Well, it can dream on unless the government finally recognises the AELP case for a stand-alone £1 billion non-levy budget which would prevent many local communities around the country from becoming apprenticeship deserts."
He added: "The disastrous reality is that providers are already turning away SME employers willing to start new apprentices because they cannot afford to risk not being funded for the training and now the agency is telling them emphatically that they mustn’t take the risk."
The AELP has previously called for a minimum annual budget of £1 billion to be made available for non-levy employers to spend on apprenticeships.