Apprenticeships now and the proposed plans going forward Updated Dec 2017

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Apprenticeships now and the proposed
plans going forward
Employer
Update

Why Employers
Engage with Apprenticeships
• 80% Companies take on apprentices have reported a significant increase in
employee retention
• 77% of employers consider Apprenticeships make them more competitive;
• 76% of those employers who employ apprentices agree this makes the
workplace more productive.
• Around 81% of consumers prefer dealing with a company which employs
apprentices.
• Employers who employ apprentices agree that Apprenticeships lead to a
more motivated and satisfied workforce.
• Apprenticeships programme to provide Employers with the skilled workers
that they need for the future.
• One in five employers are hiring apprentices to help them through the
tough economic climate. Giving them employer growth at low cost

Funding and delivery
comparison
The way it is was previously (pre May 2017)
Current method
Skills Funding
Agency
Training
Organisation
Learning /
Assessment
Awarding
Body
Employer
Contribution (Levy)
SME payment
App Service /
Education &
Skills Funding
Agency
Employer
Training
Organisation
Awarding
Body
Assessment
Learning

Apprenticeship Funding and the
Changes planned
Provider
control
• Provider funded for delivery of 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 (£2 for every £1 from employer)
Employer
control
• Content and delivery controlled by employer
• Large employers pay 0.5% paybill tax as levy
• Employer uses digital voucher to pay for training and assessment
4

Apprenticeship Levy:
how it works
• The purpose of the apprenticeship levy is to fund an
increase in the number and quality of apprenticeships
• The levy will apply to all UK employers in both the
private and public sectors.
• It is payable on annual pay bills of more than £3
million. Employers with an annual pay bill of less than
£3 million will not pay the levy and will be able to
access funding from Training Providers who a non-
Levy Allocation.
• Less than 2% of UK employers will pay the
apprenticeship levy.

How much you will pay
• The levy will be charged at a rate of 0.5% of an
employer’s pay bill. Levy payments will be
collected monthly by HM Revenue and Customs
(HMRC) through Pay as You Earn (PAYE), payable
alongside tax and National Insurance. Pay bill will
be based on total employee earnings subject to
Class 1 secondary National Insurance
Contributions (NICs).
• There will be a £15,000 fixed annual allowance for
employers to offset against their levy payment

Examples
Example 1:
• Employer of 250 employees, each with a gross salary of
£20,000 would pay:
• Pay bill: 250 x £20,000 = £5,000,000
• Levy sum: 0.5% x £5,000,000 = £25,000
• Allowance: £25,000 - £15,000 = £10,000 annual levy payment
Example 2:
• Employer of 100 employees, each with a gross salary of
£20,000 would pay:
• Pay bill: 100 x £20,000 = £2,000,000
• Levy sum: 0.5% x £2,000,000 = £10,000
• Allowance: £10,000 - £15,000 = £0 annual levy payment

What happens to the Levy
• The money will be collected by HMRC will be made available to
them via an Apprenticeship Service account.
• Employers will be able to use this to pay for training for
apprentices. The service will also support employers to
identify a training provider, choose an apprenticeship
training course and find a candidate.
• The Apprenticeship Service account will also enable employers
to:
• select an apprenticeship training course
• choose the training provider or providers they want to
deliver the training
• post apprenticeship vacancies
• The main functions of this service are in place now.

Apprenticeship Reforms:
Withdrawal of Frameworks
• As part of the apprenticeship reform
programme, apprenticeship
frameworks will be replaced by New
Standards
• This will not affect those apprentices
currently completing their
apprenticeship on existing
frameworks

Spending the Levy
• Employers will be able to use their funding (up
to a cap which will depend upon the standard
or framework that is being trained against) to
cover the costs of an apprentice’s training,
assessment and certification.
• Employers will not be able to use levy funds to
cover all the costs associated with taking on an
apprentice. For example, overheads,
supervision costs and apprentices’ wages will
not be funded by the levy.

Changing Content
What is being removed?
• Employment Rights and Responsibilities
disappears
• However, apprentices will still need good
careers advice, information and guidance
• Personal Learning and Thinking Skills will be
replaced by Behaviours; these will require
specific training
• On Programme Assessments will be replaced by
independent End Point Assessments

SMEs
(organisations not qualifying for Levy)
• SMEs to stay on the current funding
system until 2019

Comparison of Framework and
Standards Funding
Frameworks (current system) Standards (newly planned)
2012/13 listed rates per qualification on
LARS not linked to fee charged to
employer
Different rates per age group (16-18, 19-
24, 25+)
Cost weightings, disadvantage and area
cost uplifts
Achievement 20% of funding paid to
provider
25% discount for large employers with
1000+ staff
16-24 Apprenticeship Grant for
Employers with less than 50 employees
One of 6 capped rates per standard
linked to fee
Rate is the same regardless of age with
16-18 employer incentive only
No disadvantage and area cost uplifts
Successful completion payment to
employer
No incentive payment to employers with
50+ staff
Small employer (less than 50 employees)
incentive paid to employer

Apprenticeships Standards
Draft Funding Model
14

Who provides the training
• Employers can only spend their levy funds on
apprenticeship training delivered by an approved
provider.
• This could be through buying in training from an
approved provider or delivering the training
themselves.
• To deliver training the employer would need to
register as an approved provider and be subject to
Education & Skills Funding Agency (ESFA) quality
arrangements and Ofsted inspection.
• This may be onerous for employers tying
them down with red tape

Revolution in Assessments
• Training Providers will:
• have a diminished responsibility for
assessing
• Increase added value to the
Apprenticeship system; by including
the delivery of high quality learning
tailored to employers’ needs.
• Training standards will be specific to
job families/roles and not sectors

Keep in Touch:
• https://uk.linkedin.com/in/safaraz
• https://www.facebook.com/pathwaygroup/
• @pathwaygroup @SafarazAli
Safaraz Ali (Saf)
Safaraz@pathwaygroup.co.uk
Alternatively phone: 0121 707 0550

Apprenticeships now and the proposed plans going forward Updated Dec 2017

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