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Apprenticeship Update: A Guide for Employers & Training Providers

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A guide for employers and trainers providers, working with apprentices. Detailed information about apprenticeship funding plans.

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Apprenticeship Update: A Guide for Employers & Training Providers

  1. 1. An Apprenticeship Update a Guide for Employers and Training Providers 27th October 2016
  2. 2. WHY? Rationale for Reforms Rationale for Reforms Employer Driven Employers designing apprenticeships to make them more responsive to their needs and the future economy, and controlling funding Simplicity Simplifying apprenticeship standards so that they are shorter and more accessible Quality Improving the quality of apprenticeships so that they are viewed with the same esteem as University
  3. 3. Apprenticeship Funding and the Changes planned Provider control • Provider funded for delivery of Specification of Apprenticeship Standards for England (SASE) framework • Employer contribution expected but not always collected Transition • Employers have more control over content of Standards • Funding partially to employer (incentives) and provider • Employer contribution in cash Employer control • Content and delivery controlled by employer • Large employers pay 0.5% paybill tax as levy with a 10% top-up • Employer uses digital voucher to pay for training and assessment 3
  4. 4. Final funding levels announced on the 25/10/16 include: • Higher funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards to support improved quality, and greater flexibility to train those with prior qualifications; • Longer period of time for employers to spend funds in their digital account, now with 24 months before they expire, an increase from our original proposal of just 18 months; • There is a commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to apprenticeship training agencies in 2018 • A 90 per cent contribution from government to the cost of training for employers that will not pay the levy; meaning a contribution of 10% for SMEs
  5. 5. Final funding levels announced on the 25/10/16 include: • A 100 per cent contribution from the government to the cost of training for small employers, that will not pay the levy and who take on apprentices who are 16 to 18 years old, 19 to 24 year old care leavers, or 19 to 24 year olds with an education and health care plan; • £1,000 each from government to employers and training providers when they take on 16 to 18-year-olds, 19 to 24-year-olds who were in care or who have an education and health care plan; • Help for training providers to adapt to the new, simpler funding model through an additional cash payment equal to 20 per cent of the funding band maximum where they train 16 to 18 year olds on frameworks; and • A simplified version of the current system of support for people from disadvantaged areas, to ensure the opportunity to undertake an apprenticeship is open to everyone, no matter where in England they live, their background or family circumstances. • an important intervention from the new apprenticeships minister, Robert Halfon.
  6. 6. Subcontracting saved in final apprenticeship plans The proposals published in August stated that the main provider would need to directly deliver at least half the training for each apprentices. • However, it has been announced that “At the employer’s request, and subject to their agreement, main providers will be able to bring in subcontractors to deliver whole, or parts of, frameworks or standards.” At the moment we are not sure what evidence will be required for this. • Nevertheless the main provider will have to directly delver some of the training for each employers apprenticeship programme – but will this will not need to be significant proportion. • Providers with contract values below £100k will now not have to join the register (however, they still can apply if they wish to) – this requirement appears to have been dropped in the latest document release. • The document released on the 25/10/16 states: “For the time being, we will retain the threshold, which means that organisations who want to deliver less than £100k of apprenticeship training per year as a subcontractor will not need to apply.”
  7. 7. Disadvantage Uplifts • In the original proposal it was anticipated that Disadvantage uplifts would go. • Which would have been circa 32% additional funding for those living in the most deprived areas being removed. • As reported in the FE Week the Apprenticeship Minister as stated that that the government will be “investing £60 million in supporting the training of apprentices from the poorest areas in the country to ensure social mobility for all.”
  8. 8. Disadvantage Uplifts According to government sources • “Overall, government will make available at least the same amount on disadvantage payments as under the current system of more complex uplifts” • “These payments will come direct from the government and will not be deducted from an employer’s digital account” • “This will be in place for the first year while we review the best ways of ensuring apprenticeships provide equal opportunity to all, regardless of their circumstances. This review will look at the role of employers, as well as training providers, and the differences in approach that may be needed in different parts of the country. We will work with Opportunity Areas to develop and test different approaches” Deprived Area as applied in the Index of multiple Deprivation Uplift Apprentice who lives in Top 10% Deprived Area £600 Apprentice who lives in the next 10% Next 11-20% Deprived Area £300 Those Apprentices in the next 7% Next 21-27% Deprived Area £200
  9. 9. Proposals in August Final Policy Expiry of digital funds after 18 months Extended to 24 months – helping employers to prepare for the new system and to adapt training programmes Support for 16-18 year old apprentices - £1000 payment to employers and training providers Retaining the £1000 payments plus extra government funding to provide a transitional 20% uplift for providers training 16-18 year olds on a framework. Also applies to 19-24 year olds formerly in care or have a Education and Health Care plan Removal of disadvantage uplift Retain a simplified version of current system for one year to support those from disadvantaged areas whilst review best way to support disadvantaged groups Key changes since August • In August, we published our proposals for apprenticeship funding. Since then, we have been listening to employers, training providers and other stakeholders to help us develop our final position. The adjustments we have made will help ensure that the reforms benefit more employers and apprentices.
  10. 10. Funding Example - The way it is Now Skills Funding Agency Training Organisation Learning / Assessment Awarding Body Apprenticeship Business Administration Level 2 16-18 19-23 24+ Drawdown (Per Learner) Pearson Edexcel FS English Level 1 £776.35 £362.00 £289.60 Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60 Pearson BTEC Level 2 Diploma in Business Administration (​QCF) £4,270.97 £1,991.50 £1,593.20 Drawdown £5,823.66 £2,715.50 £2,172.40 Total Drawdown (Inc. Avg Uplift of 10%) £6,406.03 £2,987.05 £2,389.64 Apprenticeship Customer Service Level 2 16-18 19-23 24+ Drawdown (Per Learner) Pearson Edexcel FS English Level 1 £776.35 £362.00 £289.60 Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60 Pearson BTEC Level 2 Diploma in Customer Service (​QCF) £3,594.35 £1,676.00 £1,340.80 Drawdown £5,147.04 £2,400.00 £1,920.00 Total Drawdown (Inc. Avg Uplift of 10%) £5,661.74 £2,640.00 £2,112.00 Funding Drown Down by the Provider from the Skills Funding Agency Awarding Body Registration and Certification Fee £175 Awarding Body Registration and Certification Fee £175 English Mathematics Main Learning Aim Area and Disadvantage Uplift Multipliers = Total Funding Drawn Down
  11. 11. Funding and delivery comparison The way it is Now Proposed Plans Skills Funding Agency Training Organisation Learning / Assessment Awarding Body Employer Contribution (Levy) SME payment DAS/ Skills Funding Agency Employer Training Organisation This could be the Employer Awarding Body Assessment 20% of the Funding Learning 80% of the Funding to also include Awarding Body fees for any qualification within the new Standards Employer Pays LEVY to HMRC no mater if they access apprenticeships or not
  12. 12. Funding Example Proposed Plans Employer Contribution (Levy) SME payment DAS/ Skills Funding Agency Employer Training Organisation This could be the Employer Awarding Body Learning £1,200 of the Funding to also include Awarding Body fees for the embedded qualification which is anticipated to be Circa £150 leaving £1,050 for Training + any uplift Employer Pays LEVY to HMRC no mater if they access apprenticeships or not Learning £1,600 of the Funding to also include Awarding Body fees for the embedded qualification which is anticipated to be Circa £150 leaving £1,400 for Training + any uplift End Point Assessment c£400 of the Funding (this will have to be paid out before you can draw down funding Customer Service Level 2 £1,500 there is no additional uplifts for learner age or being within London Note: Fees dependant on individual awarding body and assessment organisation fees End Point Assessment c£300 of the Funding (this will have to be paid out before you can draw down funding Administration Level 2 £2,000 there is no additional uplifts for learner age or being within London Maths and English Additional Funding Outside of employer contribution £471 for each Maths and English Additional Funding Outside of employer contribution £471 for each
  13. 13. Funding and Delivery Comparison for SMEs The way it is Now Proposed Plans Skills Funding Agency Training Organisation Learning / Assessment Awarding Body Employer Contribution SME payment DAS/ Skills Funding Agency Employer Training Organisation This could be the Employer Awarding Body Employer Pays 10% of training Fee to the Provider The Provider Draws Down 90% of the funding from the Skills Funding Agency The Provider Pays for the End Point Assessment and delvers the training Example: Administration Band £2,000 Employer Pays £200+VAT Government Pays £1,800
  14. 14. What about non Levy payers? Co-Investment There are two types of employers who will benefit from government support towards the cost of their apprenticeships training: • Employers who haven’t paid the levy and want to purchase apprenticeship training from a provider • A levy-paying employer who with insufficient funds in their digital account to pay for the cost of training and assessment they want to purchase • The government will pay 90% of the costs of training and assessment. • The employer will be responsible for paying 10% of the costs. Government 90% Employer 10%
  15. 15. Purchasing Training - Summary
  16. 16. We will allocate each individual framework pathway to: • the nearest funding band based on the current rate of funding the government pays providers for training adult apprentices but with some extra support… Funding bands for frameworks 16 16-18 uplift • Transitional support of 20% of funding band maximum paid directly to training providers • Also applies to 19-24 year olds formerly in care or have Education and Health Care plan STEM Support Additional support in areas of disadvantage • For all STEM framework pathways we will increase the current government-funded adult rate by 40% at Level 2 and 80% at Level 3 and above, and then allocate these frameworks to the nearest funding band. Training providers receive: • An additional £600 for training an apprentice from top 10% of deprived areas, £300 for next 10% range and £200 for the next 7% range
  17. 17. Apprenticeship standards are employer-designed and offer employers and apprentices a more robust and relevant training experience. Recognised in the funding system by allocating higher funding bands to apprenticeship standards, relative to equivalent frameworks, where appropriate. Funding bands for standards Principles •Lower cost standards should be allocated to the nearest funding band •Those standards currently assigned to the widest and highest cost funding band will be allocated to a new band within this range. Taking into account: •Actual prices employers have negotiated with providers. •Evidence from Trailblazer employers on the estimated costs eligible apprenticeship training •The funding bands set for equivalent frameworks •The level and nature of the training, and consistency across similar types of apprenticeship standard. Existing apprenticeship standards have been allocated to new funding bands according to the following principles:
  18. 18. 16-18 year olds Government will pay £1,000 to employers, and a further £1,000 to training providers if they train a 16-18 year old apprentice Disadvantaged young people Government will pay £1,000 to employers, and a further £1,000 to training providers if they train 19-24 year olds leaving care or who have a Local Authority Education and Healthcare plan Additional learning support We will pay training providers up to £150 a month to support these learners, plus additional costs based on evidenced need English and Maths training To meet minimum standards of English and maths we will pay training providers £471 for each of these qualifications (Level 1 and 2) Small Employers Employers with fewer than 50 employees will have 100% of the training and assessment costs covered when training a 16-18 year old (or 19-24 year old formerly in care or has a Local Authority Education, Health and Care plan Additional Support
  19. 19. Prior Qualifications Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold. From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills Cross-border funding Applying a single test for funding through the English system: based on whether the apprentice’s main place of employment is England. ‘Workplace’ is where the apprentice is expected to spend the majority of their time during their apprenticeship. Transferring funding During 2018 the Government will introduce means for employers to transfer up to 10% of the levy funds to another employer with a digital account, or to an ATA. New employer steering group to design this system so that it meets their needs Funding rules
  20. 20. Contracts • Once a provider has been selected by an employer to deliver training to their apprentices, they will need to negotiate costs ensuring contracts are in place so that the funding can flow. • The costs for end point assessments will be included in the total price for the apprenticeship agreed with the employer. • Providers will be required to pass this agreed amount on to the assessment organisation selected by the employer.
  21. 21. Working with levy-paying employers Employer A Employer B (C.D.E . . . ) Subcontractor if Selected Skills Funding Agency End-point assessment organisation (standards only) Provider All providers need to be listed on the Register of Apprenticeship Training Providers Contract for Service Contract for Service Contract for Service Contract for Payment Provider Agreement Apprenticeships – employer A Apprenticeships – employer B (C, D, E…)
  22. 22. Funding Comparison The Hard Facts Please note: • Disadvantage uplifts have been protected and range from £200 - £600 for those qualifying • Extra 20 per cent of funding band limit for 16-18 year-olds (in addition to the £1,000 provider and £1,000 employer incentive) For 16-18 year olds the position is worse however, this is offset by Employer and Training Providers each being paid £1,000 in the form off an age grant for this group (SMEs Only) . (Although we can not confirm all the eligibility criteria at this stage) Business Administration Level 2 How it is Now Post April 2017 English £475.98 £471.00 Maths £475.98 £471.00 Diploma in Administration £2,618.56 £2,000.00 Uplift (Average) £357.05 £0.00 Drawdown £3,927.57 £2,942.00 Loss of Funding £985.57 Income Reduction 25% Awarding Body Fee -£175.00 -£150.00 End Point Assessment £400.00 Left for Delivery of Training £4,102.57 £2,692.00 Loss of Funding Going into Training £1,410.57 Drop in Funding Available for Training (average) 34% Customer Service Level 2 How it is Now Post April 2017 English £475.98 £471.00 Maths £475.98 £471.00 Diploma in Customer Service £2,203.72 £1,500.00 Uplift (Average) £315.57 £.00 Drawdown £3,471.25 £2,442.00 Loss of Funding £1,029.25 Income Reduction 30% Awarding Body Fee -£175.00 -£150.00 End Point Assessment £300.00 Left for Delivery of Training £3,646.25 £2,292.00 Loss of Funding Going into Training £1,354.25 Drop in Funding Available for Training (average) 37%
  23. 23. Current Position Employer AGE Grants Current Position • AGE Grants • Apprenticeship grant for employers of 16 to 24 year olds £1,500 • However, • Employer have to employ fewer that 50 employees • Is issued on a first-come, first-served basis within a training organisation’s allocation of Grants • You can only claim up to 5 Grants during the time the Grant is available. • commit to employ your apprentice(s) for a minimum of 12 months on the apprenticeship programme or the time it takes them to complete their apprenticeship, whichever is the greater
  24. 24. Current Position Employer AGE Grants Current Position • AGE Grants • Apprenticeship grant for employers of 16 to 24 year olds £1,500 under the new scheme this will be reduced to £1,000 although and additional £1000 will go to the training organisation • However, • Employer have to employ fewer that 50 employees • Is issued on a first-come, first-served basis within a training organisation’s allocation of Grants • You can only claim up to 5 Grants during the time the Grant is available. • commit to employ your apprentice(s) for a minimum of 12 months on the apprenticeship programme or the time it takes them to complete their apprenticeship, whichever is the greater
  25. 25. Current Position Employer Grants Local Schemes • Many Councils including London offer incentives to employers an example is Birmingham City Council • £1,500 for recruiting in to an apprenticeship vacancy for SME’s • Learners must be • 16 to 18 years old and not in employment, education or training (NEET) (self declared): or • 18 to 24 years old unemployed for at least 1 day (self declared). • Many other areas offer incentives and you should ask your provider or local council for more information
  26. 26. 27 What is the digital apprenticeship service? National Apprenticeship Service
  27. 27. Recruit an apprentice
  28. 28. gateway.gov.uk
  29. 29. October 2016 • Publish funding bands that apply in the new system • Full set of technical rules that underpin the funding system • Calculation for English proportion • Pilot testing with employers • Register of Apprenticeship Training Providers open November 2016 December 2016 • Further employer guidance from HMRC on how to calculate and pay the apprenticeship levy January 2017 • Employers to register on the digital apprenticeship service February 2017 March 20017 • National Apprenticeship Week (6 to 10 March) April 2017 • Levy paid May 2017 • Service live • Make levy commitments To 2020 • All employers to use the service Key milestones 2016 - 2017 and on
  30. 30. Summary • Final funding levels announced • Subcontracting saved in final apprenticeship plans • Maths and English attract £471 each • Disadvantage Uplifts protected in the short to medium term • Additional learning support for training providers up to £150 a month • Individuals can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills
  31. 31. Keep In Touch Join our Apprenticeship Funding Forum for further information open to all Employer, Training Providers and others involved in the Apprenticeship Levy https://www.linkedin.com/groups/8551387
  32. 32. Keep In Touch Contact us https://uk.linkedin.com/in/safaraz https://www.linkedin.com/company/pathwaygroup https://www.facebook.com/pathwaygroup/ @pathwaygroup @SafarazAli https://uk.linkedin.com/in/eddiecottis @eddie_pathway Safaraz Ali Eddie Cottis

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