Apprenticeship levy transfer

What is the apprenticeship levy?

Derby City Council is transferring 25% of the apprenticeship levy to employers looking to recruit apprentices or upskill their existing workforce. 

Levy transfer allows your business to save money, as transferred funds are used to pay for the training and assessment costs of your apprentices.

To understand the benefits of an apprenticeship please view our information on apprenticeships.

Who can apply for a levy transfer?

Any business can apply for a levy transfer, but the following criteria are applied when making a decision.

Mandatory eligibility

• The business applying for levy transfer has its head office based within the Derby City Council area boundary.
• We will consider supporting employers where their head office is elsewhere, however they have a site or office in the city and the apprentice will be based or employed there.
• They are able to meet the requirements of the Education and Skills Funding Agency (ESFA) for transfer – as per the levy transfer checklist, have signed the ESFA Agreement, have completed the DCC application form and agreed to our terms and conditions.

Other considerations

Levy transfer is not an unlimited resource and the Council is mindful of this. Therefore, we aim to ensure it is utilised to make the greatest impact in the city in terms of, supporting our growth sectors, supporting the development of skills required in the city and supporting people into employment, considering the impact of the pandemic on the city.

We will therefore prioritise applications for levy, that meet the following criteria:

Priority sectors

We will seek to support employers within our priority sectors where growth is required to diversify our local economy and meet skills for the future.

• Digital and creative
• Financial, insurance and other professional services
• Health and social care
• Low carbon or future fuels
• Manufacturing and engineering.

Skills shortages

We will aim to support apprenticeship standards that help reduce the skills shortages present in the city and reduce the predicted future skills gap. This will in turn ensure employers meet their skills requirements and support their growth. We are in the process of better understanding this gap in the city. In the meantime, as identified by Midlands Engine, apprenticeship standards that support growth in the following areas will be prioritised:

• Digital – such as AutoCAD, programming, and software development
• Manufacturing and engineering
• Construction and related skills
• Business development
• Risk analysis
• Accounting
• Customer relationship management
• Surveying
• Carpentry
• Procurement
• Merchandising
• Mental health
• Social work
• Restaurant operation
• Cooking and food safety or preparation

Widening participation

We will prioritise supporting employers who have not previously had an apprentice. We aim to support employers to think differently about how they recruit talent and to encourage them to upskill their existing workforce.

Small and medium-sized enterprises (SMEs)

We will favour SMEs that do not have their own apprenticeship funds and do not pay levy. These employers will be prioritised over those that have spent their levy.

New apprentices

We will aim to support employers recruiting new staff as apprentices; providing opportunities to individuals currently out of work, considering the numbers of people who have found themselves unemployed as a result of the current pandemic.

Employers engaged with our business support offer

We aim to provide a holistic offer of support to employers who are already engaged and receiving support from the Council. For example, those who are receiving support via our Derby Enterprise Growth Fund or ASCEND Programme. These employers are likely to be meeting our wider economic growth objectives in terms of bringing investment and jobs into the city and supporting the diversification of our local economy.

Destination data

We will look to support employers who have a clear destination in mind for the apprentices and / or have evidence of this with previous apprentices. For example, they have offered full-time employment post-completion.

If you would like an informal discussion about eligibility prior to application, please email EmploymentandSkills@derby.gov.uk.

As an employer, what do I need to know?

• You can only use the transferred funds for apprenticeship training and assessment.
• Transferred funds can only be used for apprenticeship standards.
• A transfer can fund up to the funding band maximum of a standard. If the cost of training is more, you’ll have to pay the difference to the training provider.
• You’ll need to create an account on the apprenticeship service to receive the transfer and pay for apprenticeship training. To register go to GOV.UK: How to register and use the apprenticeship service as an employer.
• You’ll need to sign a legally binding agreement with the Education and Skills Funding Agency (ESFA). For more information view the GOV.UK information on ESFA Apprenticeship Agreement for Employers.
• If the apprenticeship stops then the funding will stop. You will not have to pay any funds back to Derby City Council. Any allocation of our levy put aside to pay for your apprenticeship will not be returned to Derby City Council. It is therefore imperative you understand and are ready to fulfil your commitments to take on an apprentice prior to applying for levy transfer.
• If Derby City Council runs out of levy money during your apprenticeship, you must make the relevant employer co-investment contribution. Refer to the 'Paying for an apprenticeship' section of the funding rules for information on the rate that needs to be paid. Derby City Council will however endeavour to forecast accurately to ensure it is able to fund your apprenticeship training for the duration of the apprenticeship.
• For more information on levy transfer, view the GOV.UK information on receiving a levy transfer from another business to fund an apprenticeship.

How to apply

If you wish to apply for our levy transfer, you must first complete a levy transfer application form and email it to employmentandskills@derby.gov.uk.

Levy transfer application form

All submitted application forms will be reviewed and feedback will be provided as to whether you are eligible for the transfer. If so, we will ask you to complete an apprenticeship Levy transfer agreement.

Support and guidance will be available throughout the application process. 

For an informal chat about the apprenticeship levy, please email employmentandskills@derby.gov.uk.

Terms and conditions

Derby City Council is working in partnership with key partners to offer businesses the opportunity to access apprenticeship levy transfer funds (the Funds). Derby City Council is committed to supporting workforce development across the city to help build a stronger and inclusive local economy.

This Agreement sets out the terms and conditions on which Derby City Council will transfer and the Employer will receive the Funds. In consideration of the Employer providing the required apprenticeship training and assessment in accordance with the terms of this Agreement, Derby City Council will transfer the Funds to the Employer.

Derby City Council and the Employer (being the receiving employer for the purposes of this Agreement) agree that the Funds will be used by the Employer to pay for the training and assessment costs of the apprenticeship/s.

The apprenticeship levy transfer will support Derby’s key priority sectors as listed in schedule 1 to this Agreement.

Both parties acknowledge / agree that, in accordance with Government’s apprenticeship levy guidance:

• the Funds shall be paid monthly for the duration of the apprenticeship
• Derby City Council is a levy-paying employer and can make the transfer to another employer
• the employer can receive, and use transferred funds
• sending and receiving employers need to be registered with the Apprenticeship Service
• transfers shall only be used to pay for training and assessment that meets the Apprenticeship Standards as defined by the Institute of Apprenticeships and Technical Education
• transfers can only be used for new starts or existing staff.

Starting the transfer

Derby City Council and the Employer will agree the details of the transfer of funds, for example, which apprenticeship standards, how many apprentices, the cost.

Derby City Council and the Employer are registered with the Apprenticeship Service and the following will be undertaken in both their accounts to complete a transfer:

• connect with each other via the Digital Account
• the Employer will add the apprentice details to the Digital Account with support from their designated Training Provider
• confirm the transfer.

Transfer of Funds from the Council

Before the Council makes a transfer from its apprenticeship account, it will ensure:

• there are sufficient funds to transfer to the Employer for the duration of the apprenticeship
• it has a clear understanding of the forecast cost, which will cover the duration of the apprenticeship
• that the Council will be funding only the training and assessment cost of the apprenticeship
• that it agrees with the Employer details of the apprenticeships being funded by the Council
• they are aware of the funding rules around transferring apprenticeship funds.

Receipt of Funds by the Employer

The Employer is aware of and agrees:

• that as far as reasonably possible transferred funds will only be used to support residents of Derby or an employer who operates within Derby city catchment
• that transferred funds may only be used for apprenticeship training and assessment
• that transferred funds can only be used for apprenticeships that meet the apprenticeship standards
• that it must use an approved Apprenticeship Training Provider to deliver the recognised standards
• that it must have an account with the Apprenticeship Service to receive the transfer and pay for apprenticeship training. Please note that your approved Apprenticeship Training Provider will support you with the setup of the account
• to ensure that the Funds are transferred promptly to the approved Apprenticeship Training Provider
• that funding will stop if the apprentice is withdrawn from the programme or is placed on a break in learning, the employer must notify Derby City Council of any changes
• that the Employer must immediately notify both the Council and the approved Apprenticeship Training Provider if an apprentice funded by a levy transfer leaves or is dismissed by the Employer
• to always co-operate with the approved Apprenticeship Training Provider and provide all information requested in a timely manner
• to provide details of the nominated person responsible for the management and administration of the Employer’s levy (DAS) account
• that the Employer will not have to pay any funds back to Derby City Council, unless it is in breach of this Agreement or the principles of the levy transfer
• that if Derby City Council runs out of funds, the Employer must make a 5% contribution to the cost of the apprenticeship training and the government will pay the remaining 95% (this is called co-investment)
• that 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 approved Apprenticeship Training Provider
• that it has read and are compliant with the Apprenticeship Funding Rules, including around transferring apprenticeship funds
• that Derby City Council may retain all or any part of the apprenticeship levy transfer if, in its absolute discretion, it considers that the terms of this Agreement and/or any relevant legal requirements have not been met by the Employer
• that the amount of Apprenticeship Levy transfer is limited, and the Employer should not assume it is eligible for the Funds unless and until it receives confirmation of this from the approved Apprenticeship Training Provider.

Subsidy Control

Subsidy Control is a term that refers to forms of public assistance, using taxpayer-funded resources, given to undertakings on a discretionary basis, with the potential to distort competition and affect international trade.

5% of all funds received as a transfer from another employer count as state aid.

To avoid exceeding the allowed limit of subsidy control the Employer will check:

• the extent of any subsidy already received in the past 3 years
• if part of a connected organisation, how much combined total subsidy has been received in the past 3 years

By signing this agreement the Employer confirms it has read the relevant GOV.UK: Complying with the UK’s international obligations on subsidy control: guidance for public authorities and acknowledges that it is not in breach of any Subsidy Control rules, namely being in receipt of state aid of more than £350,000 in the last three years.

This Agreement and any dispute or claim arising out of or in connection with it shall be governed by and construed in accordance with the law of England and Wales and Derby City Council and the Employer irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement.

Marketing

By signing this agreement, the employer agrees to contribute to the development of marketing and promotional material in relation to their apprenticeship levy transfer. This could entail, the development of a case study which supports how employees and employers can benefit from apprenticeships, or attendance at promotional events or webinars promoting levy transfer to other employers.

What happens after the application form is submitted?

1. Assessment - after submitting your application form this will be reviewed. 
2. Application – in reviewing your application, we will undertake the due diligence checks necessary to transfer. 
3. Decision - someone from the Apprenticeship team will be in touch within two weeks to provide a decision on funding your apprenticeship.
4. Agreement - once we agree transfer, you will be required to sign an agreement between your business and Derby City Council. We will then connect our apprenticeship accounts.
5. Transfer - this will follow with the input of details into the apprenticeship Service Account from yourself and your training provider, followed by final approval by Derby City Council for transfer.

As soon as your apprenticeship starts, payments will be automatically made on a monthly basis, via connecting accounts, to your training provider. This is managed by the Education and Skills Funding Agency (ESFA).

You must notify Derby City Council and ESFA if your apprenticeship stops or pauses for any reason.

Please note that depending upon the age and/or background of your apprentice you may be eligible for incentive-payments-for hiring a new apprentice.