Companies will be free to transfer 10 per cent of their levy funds to organisations of their choice, according to new guidance issued by the Education and Skills Funding Agency (ESFA) today.
The rules affect employers who pay the apprenticeship levy and will come into effect from April this year. and mean they can transfer funds to companies in their supply chain or sector, or apprenticeship training agencies, according to the ESFA.
The funds will be used to pay for the training and assessment cost of the apprenticeships agreed, and will be paid monthly for the duration of the apprenticeship.
The guidance states: “There are currently no restrictions about who you can transfer funds to."
Any employer can receive and use transferred funds, as long as they are registered on the apprenticeship service.
Understanding of cost
Those companies that transfer some of their apprenticeship funding will need to “have a clear understanding of the forecasted cost” to them, which will “cover the duration of the apprenticeship they’ve agreed to fund", according to the ESFA.
Employers who receive funds from another company are warned that “if the employer sending you funds runs out of funds, we will ask you to make a 10 per cent contribution to the cost of apprenticeship training”.
Mark Dawe, chief executive of the Association of Employment and Learning Providers, said: "The government is fulfilling one of its promises to levy payers, although it should be noted that non-levy payers in receipt of this support will still have to make a 10 per cent financial contribution."
He added: "The good news for training providers on the apprenticeship register is that they don’t need to have an ESFA non-levy contract to be able to deliver apprenticeships to these employers."