1. Levy forecasting Nick Linford Director at Lsect 22/09/16
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5 July 2016
Levy forecasting
22/09/16
Nick Linford Director at Lsect
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2. The apprenticeship levy funding
£1.808
£2.010
£2.231
£2.450
As a tax on payroll, the levy income will be dependent on the size of the economy
But…
What does it have to pay for?
How is it likely to be used?
Do you think £2.45bn be enough?

3. What does the £2.45bn need to pay for?
The levy top-up (10%)
Levied employers funding per apprentice until their levy pot runs out
Subsidy for non-levied employers or levied employers when the pot is empty (90% proposed)
Remaining funding instalments for apprentices on frameworks and standards that started before 1 May (including the three types of employer incentives that are part of the standards ‘pilot’)
£245m
£1bn?
£700m?
£500m?

4. But the £2.45bn also need to pay for…
Fully-fund at the relevant upper limit year olds when at an employer with fewer than 50 people
Fully-fund at the relevant upper limit year olds formally in care or who have a Local Authority Education and Healthcare plan when at an employer with fewer than 50 people
£471 for each level 1 and level 2 English and maths qual to meet the minimum for the framework or standard
16-18 employer incentive (£1000 proposed)
16-18 provider incentive (£1000 proposed)
19-24 year olds formally in care or who have a Local Authority Education and Healthcare plan employer incentive (£1000 proposed)
19-24 year olds formally in care or who have a Local Authority Education and Healthcare plan provider incentive (£1000 proposed)
Remaining funding instalments for apprentices on frameworks and standards that started before 1 May (including the three types of employer incentives that are part of the standards ‘pilot’)
£150 a month per apprentice where they are eligible for additional learning support, “plus additional costs based on evidenced need”
Incentives and Eng and Maths could easily cost £500m+

5. How is it the levy likely to be used?
So close to 20,000 employers will have something in their levy pot – but system design depends on many of them not using it
Consider, if you were running a big company would you let your HR manager leave levy money unspent?
Easiest way to use it is place existing employees on management apprenticeships.

6. Quiz!
25+ higher management apprenticeship frameworks generate around £3k and starts August 2016 to April 2016 already more than whole of 2015/16
What % of 25+ higher apprenticeships framworks do you think are in management?
83%

7. The rise of the manager apprentice
Now the 3rd most popular apprenticeships

8. Management standard will be best seller
> Upper-limit £9k cap and for all sectors
> Developed by Civil Service, Barclays, BBC, HMRC, Boots, CMI etc
> CFA say there are 400,000 new managers a year
> 400,000 x £9,000 = £3.6bn
> Removal of allocations means no ring-fence for (so technically all levy could be spent on 25+ managers)
> Flood-gates will open on 1 May (no advantage to employer paying during the pilot)
> Universities (public and private) could corner the market and utilise online (see Open University plan)

9. Is ‘employer ownership’ compatible with ‘social justice’?
Do you think £2.45bn be enough?
Is ‘employer ownership’ compatible with ‘social justice’?