The Department for Education and The Department for Business Innovation and Skills are reviewing the current funding arrangements for Apprenticeships in England with a view to making a reform in funding.
Skills minister, Matthew Hancock states:
“For Apprenticeships we need a simple system that dispenses with the complexity of large numbers of government-set funding rates. Employers are the best judge of which training is worth investing in. Therefore we propose that Government will provide funding in proportion to the investment employers are willing to make themselves. This means that training providers will compete for business – both on quality and on price.”
This has driven the development of three new models for delivering funding reform for apprenticeships. These are:
1. Direct Payment Model: Businesses register Apprentices and report claims for government funding through a new online system. Government funding is then paid directly into their bank account.
2. PAYE Payment Model: Businesses register Apprentices through a new online system. They then recover government funding through their PAYE return.
3. Provider Payment Model: Government funding continues to be paid to training providers, but they can only draw it down when they have received the employer’s financial contribution towards training.
If you wish to read the ‘Consultation on Funding Reform for Apprenticeships in England’ document, please click here.