24th August 2017

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The Apprenticeship Levy for schools that are part of a Local Authority

Many schools that are part of a Local Authority (LA) will indirectly fall under the scope of the Apprenticeship Levy, since for the purposes of the legislation, the LA will be classed as the ‘employer’ for any services and institutions that operate under its umbrella. 

In this guide, we’ll explore how this relationship works in practice and the best way for schools to go about claiming their share of Levy funds. 

Why do local authority schools fall under the Apprenticeship Levy? 

In a similar way to the manner in which the Levy works for companies that operate as part of a group, under the legislation, all local authority-run services are classed as a single entity.

This means the Levy is calculated as 0.5 per cent of the overall pay bill of LAs paying out more than £3 million annually. However, LAs with a fluctuating annual payroll may pay the Levy some months and not others. 

All Levy-paying organisations are entitled to a £15,000 allowance, however, for LAs in this situation, this will have to be shared among its constituent services and institutions. There is a degree of flexibility in how this can be applied, with LAs able to concentrate the deduction within one constituent or spread it out equally across the board. 

To take full advantage of the funds they can reclaim, LAs are also able to pool their Levy payments by registering to have their PAYE schemes hooked up to a single Apprenticeship Service account. 

When it comes to utilising their Levy funds for training, LAs are able to use these to support training in one, or several of their constituent organisations. 

LAs also fall under the scope of the government’s Public Sector Apprenticeship Targets, whereby any publicly-funded body that employs more than 250 staff has to ensure at least 2.3 per cent of its workforce is made up of apprentices. 

How LAs are distributing their Levy funds in practice 

There’s no set guidance on how funds should be distributed in this situation, which means schools looking to claim their share will have to abide by the methods employed by their LA. 

Some are allowing schools under their jurisdiction to source their own apprenticeship providers, as long as they sit on the ROATP (Register of Apprenticeship Training Providers). 

Another popular option among LAs is putting a formal procurement process into place - inviting training providers to directly apply to be on their list of approved suppliers. 

Others still are using this in combination with a ‘waiver’ - whereby schools can use providers that are awaiting approval under the bid process, allowing them to provide training up to a pre-agreed amount of money until they are put on to the approved suppliers list. 

Under the system, bids are usually split into lots, with training providers choosing what lots they want to bid for. 

How schools can use their share of Apprenticeship Levy funds 

The recent apprenticeship reforms have sought to make apprenticeships more engaging to employers of all shapes and sizes by giving them more of a say in the development of training standards via Trailblazer groups

There’s more than 500 standards currently in development and while teaching-specific ones haven’t been rolled out as of yet - schools can still take advantage of apprenticeship training for support staff (such as teaching assistants or IT support), or back-office management. 

Course content can also be tailored to the needs of specific roles, which means schools in all manner of circumstances can ensure apprenticeship training is relevant and helps them to meet their goals.

 Criteria around eligibility and prior qualifications has largely been scrapped, which means that schools no longer necessarily take on young people in entry-level roles. Instead, training can be used for existing staff and there’s a growing amount of higher and degree-level standards that enables employees to gain a range of higher education qualifications while learning on-the-job. 

It’s worth noting, however, that the Levy is paid on a pay-as-you-go basis - and unused funds will be removed on the same premise 24 months after they arrive in your LA’s Apprenticeship Service account. 

This means the clock started ticking for schools the moment their LA made its first Levy payment and budgets need to be projected with this cut-off in mind. 

Your turn 

Hopefully we’ve managed to illuminate how the Apprenticeship Levy will work for maintained LA schools, but if you’ve got any questions - be sure to let us know via Twitter or LinkedIn

And if you’re looking for bespoke advice on how the Levy will affect your school, don’t hesitate to get in touch with our expert Levy team today: 

Talk to our team