Call for clarity on apprenticeship levy brokerage

A trade body is calling on the film industry to transfer their unspent levy funds to facilitate more apprenticeships

UK Screen Alliance has launched what it calls a “vital apprenticeship training fund” for small and medium sized enterprises working in the visual effects sector

Calls have been made for more clarity over what apprenticeship “brokerage” fees are allowed after a film trade body unveiled a “matchmaking service” for levy funds.

The UK Screen Alliance has launched what it calls a “vital apprenticeship training fund” for small and medium-sized enterprises working in the visual effects sector.

The trade body is calling on levy-payers working in the film industry to transfer up to 10 per cent of their unspent apprenticeship levy to non-levy paying companies in the sector. It will then act as “dating agency” to match willing donor companies to small employers who otherwise may not be able to afford apprentices.

The UK Screen Alliance says it will charge a 1 per cent brokerage fee for the businesses that take on apprentices using the funds, to cover its admin costs. It will not, however, charge any brokerage fee for its members. 

Companies are not allowed to directly spend apprenticeship levy funds on brokerage; charging a brokerage fee on top of this, however, is not explicitly outside of the rules.

Calls for clarification

The chief executive of the Association of Employment and Learning Providers (AELP), Mark Dawe, has called on the government to clear up the grey area, and clamp down on any brokerage schemes which take funding away from the frontline provision.

He said: "AELP has been asking the Education and Skills Funding Agency (ESFA) for clarification over what is and isn’t allowed under the rules. What we are certain about is that any scheme which takes money away from the training and assessment of the apprentice should be looked at.

“The increased levy transfer facility adds an urgency to the matter and we have been talking to the ESFA about how to deliver on the minister’s wishes that employers make full use of the facility.”

Currently, a company can transfer a maximum of 10 per cent of its annual levy funds to employers in their supply chain, or the wider industry in which they operate. This will increase to 25 per cent from next April after an announcement by chancellor Philip Hammond to the Conservative Party conference in October.

'We identified an issue with levy transfers'

Neil Hatton, chief executive of the UK Screen Alliance said: "We are not taking any brokerage fee from the levy transfer. It is an additional fee that we propose to charge to the recipient of the transfer in order to cover our costs of administering the scheme. No levy money flows through us and the brokerage is not taken from levy money.” 

The organisation is “keen to see that excess unspent apprenticeship levy is used within our sector” to “increase the overall stock of trained competent people within the industry for the benefit of the whole industry”, he added.

"We developed the match-making idea as we identified an issue with levy transfers in that small companies don’t know which large companies have unspent levy or who to ask within that company. There may also be some embarrassment about asking. Similarly, the larger companies don’t know which of the smaller companies are willing to take on apprentices. We act as an intermediary to facilitate those introductions which lead to transfers that are entirely within the rules and spirit of what the government intends,” Mr Hatton said.

A Department for Education spokesperson said: “The apprenticeship levy is an important part of the changes to raise apprenticeship quality; creating long-term, sustainable investment in training. As of April 2018, we have made it possible for levy-paying organisations to transfer up to 10 per cent of their annual funds to other employers. This will increase to 25 per cent from April 2019.”

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