Apprentices for SME's

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Apprentices for SMEs - Funding and Hiring

Background
Safaraz (Saf) Co-founder and Head of Pathway
Group
Pathway Group has delivered a very wide range
of programmes over a period of 15 years. Starting
off as an ESOL provider as well as delivering ‘Train
to Gain’. Pathway now delivers Apprenticeships,
Traineeships, Advance Learning Loans and
Employability Programmes, across a wide range of
sectors.
Everything starts with a conversation, so let’s talk:
https://uk.linkedin.com/in/safaraz
@SafarazAli

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

Funding Example - How it Currently is
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

Funding and Delivery Comparison for
SMEs
How it Currently is
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

Funding Comparison:
The Hard Facts
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 £0.00
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%
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 of
an age grant for this group (SMEs Only) . (Although we can not confirm all the
eligibility criteria at this stage)

SME’s With Less Than a
£3,000,000 Pay Bill
Employers with fewer than 50 People working for them
will be able to train 16-18 year olds apprentices at no
cost. This will also include those 16-24 who were
formally in care or who have a local Authority Education ,
Health and Care Plan.

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
8

Current Position
Employer AGE Grants
Current Position
AGE Grants
Apprenticeship grant for employers of 16 to 24 year olds £1,500
However, employers will need to employ fewer that 50
employees.
It 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 it is available.
You must 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 greater).

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

Employing an Apprentice
Employers must pay the apprentice minimum wage during their
placement.
Apprentices are entitled to the apprentice rate if they’re either:
• aged under 19
• aged 19 or over and in the first year of their apprenticeship
Example: An apprentice aged 22 in the first year of their
apprenticeship is entitled to a minimum hourly rate of £3.40
After this first year they must be paid the Minimum Wage (i.e. it
would be £6.95 for the 22 year old).
Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
October 2016
(current rate)
£7.20 £6.95 £5.55 £4.00 £3.40

Apprentice Requirements
An apprentice must:
• Work with experienced staff
• Learn job-specific skills
• Study for a work-based qualification during their
working week. For example, at a college or training
organisation.

• Choosing a Provider
• You will be committing to a business relationship lasting at least 12 Months
therefore like any other business transaction:
• Focus on Due Diligence
• Use Social media such as LinkedIn to investigate their staff
• High turnover of staff could indicate a problem
• Access Employer and Learner Voice - this is free to access and gives you
the views of both learners and employers views for a training provider
https://learnerview.ofsted.gov.uk/results
https://employerview.ofsted.gov.uk/results
• Do a credit check using a site such as Creditsafe – you need to know that
the training provider has a solid track record and is financially sustainable
• Ask for References from current employers they deal with
• Check Companies House – Directors backgrounds; have they been
involved in insolvent companies

Choosing a Provider
Ensure that you ask for performance data. You should also ask
how this compares to the national average for the subject
area.
This is measured as the
 Success Rate and
 Timely Success Rate (how many learners achieved their
qualification within the timeframe of the
apprenticeships)
 How will they deliver the qualification, how will this be
assessed and how this fits into your business needs.

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
15

Apprentices for SME's

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Editor's Notes