Demystifying Levy Transfer Tuesday 3 rd November 2020
Welcome and Housekeeping Please note this is a Microsoft Teams Live event, so as an attendee you cannot be seen or heard. We will be using the Q+A function to take your questions for the dedicated Q+A session, so please do use this to submit any questions throughout the session. We are recording this meeting, for future reference. All slides and the recording will be circulated after the meeting
Objectives • Overview of levy transfers • Explain the way the levy pot works • Give a worked example of the impact of levy transfer on your pot • Hear the experience of a trust that has transferred levy • Hear the impact of levy transfer on a receiving employer @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
What is the apprenticeship levy transfer? • Levy-paying organisations can transfer up to a maximum of 25 per cent of the value of their annual levy fund to any other employer • Transfers can only be used to pay for training and assessment for apprenticeship standards and only for new starts • Transfers are managed through the apprenticeship service, with payments made monthly from the sending employer account into the receiving employer account • Any employer wishing to receive and use any transferred funds must register and set up an account with the apprenticeship service, and have a signed agreement with the Education and Skills Funding Agency @NHS_HealthEdEng #TalentForCare
Myth Busting • Not just the 5 per cent co-investment; the sender pays for the whole apprenticeship (in full up to the top of the funding band) • Not a lump sum; levy is transferred on a monthly basis for the duration of the apprenticeship • Levy paying organisations can receive a transfer @NHS_HealthEdEng #TalentForCare
Rules • You can’t transfer funds to another employer if you currently receive a transfer • If you’re currently transferring funds to another employer, you can’t receive transferred funds to pay for your apprenticeships • Transfer payments will leave your apprenticeship service account first, each month • If the apprenticeship stops, your transferred payments will stop as well • Training providers can not transfer funds, then deliver the apprenticeship
Benefits for Sender • Utilise Levy funding that will expire after 24 months • Direct funds in a way that benefits your organisation • Transfer funds to multiple employers • Support the viability of apprenticeship programmes – Your trust may find itself in a situation where it only wants/needs to put a certain number of people onto an apprenticeship but the training provider requires a larger number to run the programme . • Outsourced services/supply chain – Set up an agreement with an outsourced service, or an organisation in your supply chain, to fund an apprentice who will indirectly support service delivery and patient experience. @NHS_HealthEdEng #TalentForCare
Benefits for Receiver • Training for the apprenticeship will be paid in full (no co-investment) • Get help, advice and support from the transferring employer • Allow non-Levy payers access to all Training Providers on RoATP • Increase business productivity • Develop their existing workforce • Attract new talent @NHS_HealthEdEng #TalentForCare
Employers who want to receive a transfer • Employers can only use the transferred funds for apprenticeship training and assessment • Employers need to create an account on the apprenticeship service to receive the transfer and pay for apprenticeship training • Sign an agreement with the Education and Skills Funding Agency (ESFA) • Transfer payments will be made monthly • If the apprenticeship stops then the funding will stop too • The employer won’t have to pay any funds back to the sending employer • If the employer sending you funds runs out of money, the employer must make the relevant employer co-investment contribution • A transfer can fund up to the funding band maximum of a standard, if the cost of training is more, the employer will have to pay the difference to the training provider
• The levy pot is like a bucket with a tap. • On a monthly basis, the levy you pay Levy Deposits (levy deposit) enters the bucket at the top and fills up the bucket from the bottom. • It takes 2 years for the bucket to fill up unless you turn on the tap (ie spend your The Levy levy). Pot • The amount you spend affects how quickly your bucket fills up but unless you spend as much as you deposit, your bucket will start to gradually fill. • When you spend your levy, the money Levy Spend comes from the bottom of the bucket, meaning you are always spending the oldest levy money in your bucket first. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
• If your bucket is full, you need to spend Levy Deposits more each month than you are depositing in order to start emptying your bucket. • With a full bucket, spending the same amount that you are depositing each month just means your bucket is full but Expired The Levy Funds not leaking. Pot • If your bucket is full and you are spending less than you are depositing, money “leaks” out of the tap (again, the oldest money first). • Whatever money “leaks” out gets sucked Levy Spend up by HM Treasury and is no longer accessible to us. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Levy Transfer With all that in mind, why would we not consider transferring more levy to employers who don’t have any? @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
• Trust A has a bucket which can hold Levy Deposits £1.2m of levy and pays in £50k per month. • Trust A currently spends £50k per month £50k and therefore their bucket stays full but £1.2million isn’t leaking. The Levy • Trust A gets asked to transfer money for Pot 10 nursing apprentices, costing £270k. • Trust A is nervous about transferring levy as they want to have more apprentices and will therefore spend more money. • Trust A want to start a further 30 nursing Levy Spend apprentices (costing £810k) and feel committing to the levy transfer will make things too tight. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Is the situation too financially risky? • Not necessarily… the total amount that is being spent here is £1,080,000 but over 4 years this amounts to £22500 per month. • Spending an additional £22,500 per month on top of the £50k that is being spent would mean it would take 53 months to empty the full bucket, by which point the apprentices will have finished. • As long as the monthly levy deposit doesn’t change, this is a risk free transfer. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Levy Transfer Eample 1 £1,400,000 4 year model with no other changes £1,200,000 to existing apprenticeships £1,000,000 £800,000 £600,000 £400,000 £200,000 £0 -£200,000 Levy Total Current Monthly Spend Current Monthly Deposit Planned Monthly Spend Monthly Levy Transfer Request @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
• In reality, it would probably take longer than this for the pot to be used up because the £50k per month that was already being spent will reduce as existing apprentices finish their courses, meaning the total monthly spend will reduce over time. • For example, if you have a cohort of 10 business admin apprentices due to finish in 12 months and 10 nursing associates due to finish in 18 months (top of funding band), the levy forecast looks like the following graph. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Levy Transfer example 2 £1,400,000 With those 2 cohorts of apprentices finishing it now means there is over £1,200,000 £500k more in the levy pot wen the nursing apprentices and transfer finishes. £1,000,000 £800,000 £600,000 £400,000 £200,000 £0 -£200,000 Levy Total Current Monthly Spend Current Monthly Deposit Planned Monthly Spend Monthly Levy Transfer Request @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
• Both the examples I have given don’t take into account completion payments being retained and paid at the end (I have done a simple average of costs across the apprenticeship duration). • In reality, the profile of the graph will be more spiky as apprentices start and finish programmes, with completion payments causing large variances. @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
For a detailed review of your potential levy transfer budget, please get in touch with your HEE Talent for Care regional Apprenticeship Relationship Manager who will review your apprenticeship service account with you. Contact details here - https://haso.skillsforhealth.org.uk/news/health-education-england- relationship-managers-meet-the-team/ @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Questions? @NHS_HealthEdEng #TalentForCare https://haso.skillsforhealth.org.uk/
Comfort Break
Trust Perspective from Gifting Levy • Interview with East London NHS Foundation Trust – Sarah Canning, Learning and Development Business Partner - Apprenticeship lead – Rob Brooks, HEE Talent for Care Relationship Manager for Apprenticeship – East of England
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