Funding a health apprenticeship

Funding an apprenticeship

You can get help from the government to pay for apprenticeship training. The amount of money you receive depends on whether you pay the apprenticeship levy or not. Find out more about the government’s apprenticeship funding rules.

The apprenticeship levy

Employers with an annual pay bill of £3 million or more are required to pay a mandatory 0.5% levy on their payroll. These funds are deposited into a dedicated, central fund, managed by the Department of Education. The government adds a 10% top-up to your account funds.

You can access your funds through your Apprenticeship Service (AS) account to pay for apprenticeship training and assessment.

Levy funding can only be used to invest in high quality apprenticeships. It can’t be used to pay apprentice wages, for ‘top-up’ qualifications, or qualifications that are not already approved as part of the apprenticeship. The levy can also not be used for statutory licences to practise, or travel and subsidiary costs.

Your levy funds expire two years after they enter your account unless they are spent on apprenticeships.

If you don’t pay the apprenticeship levy

If your annual pay bill is less than £3 million a year, then you aren’t required to pay the apprenticeship levy. 

However, you can still access funding for apprenticeships through co-investment funding. Under this model, you pay 5% towards the cost of training and assessing your apprentice, with the government covering the remaining 95% (up to the funding band maximum).

If you train an apprentice through co-investment, you need to:

• agree a payment schedule with the University of Sheffield

• pay us directly for the training

The government pays their portion of funding directly to the University.

You may also be eligible to receive funding via a levy transfer. This is when large employers that pay the apprenticeship levy choose to transfer up to 50% of their unused levy funds for the year to other businesses, to pay for their apprenticeship training and assessment. Transferring levy funds is a way for employers to support smaller businesses or charities and expand the reach of apprenticeship opportunities. 

Additional funding

You can also get an additional £1,000 to support your apprentice in the workplace if, at the start of their apprenticeship training, they are:

• 16 to 18 years old or

• 19 to 24 years old with an education, health and care (EHC) plan, or experience of local authority care

You can spend this incentive payment on any costs related to their employment, for example their salary, travel costs or uniform.

How to fund the salary of apprentices

The main difference between apprentices and traditional students is that apprentices are employed for the duration of their apprenticeship.  Employers must find the salary costs of the apprentice during training and manage their release time and backfill during study. 

The salary backfill element is often seen as a barrier to increasing the number of apprenticeships, however when compared to the long-term savings that an apprentice brings to an organisation the case can often be made for that initial investment. No one solution works for every organisation, but the following are worth considering when thinking about how to fund the salary of apprentices:

Existing vacancy

Consider employing an apprentice into an existing vacancy, with any underused salary costs used for backfill.

Existing staff

Consider making a business case to hold a permanent apprenticeship vacancy within your team’s structure that is supernumerary to the establishment.

Reciprocal placements

Consider working with other local employers and your training provider (the University of Sheffield) to organise reciprocal placements. This means when your apprentice is on placement you receive an equivalent apprentice to replace them.

Calculate long-term savings

Do you struggle to recruit staff who stay longer term? Would someone on an apprenticeship provide a more longer-term saving? You could calculate your current agency costs and staff turnover rate and compare these costs to the initial investment required to train an apprentice.