A comprehensive report prepared by Teresa Frith of 'Association of Colleges'. This document outlines the importance and purpose behind the 'apprenticeship reform' (changes made to apprenticeship funding), and the government's take on it all. As well as providing information about the apprenticeship reform funding and processes, the implications the levy will have on colleges has also been explained.

1. Apprenticeship Reform and the
implications for colleges
Teresa Frith
March 2017

2. What are the main aims of the Reforms?
The Government’s message
• Employer driven
• Quality
• Simplicity
The aims of the reforms in reality?
• Increase productivity
• Achieve the target!
• Reduce public funding
• Reduce government responsibility

3. 1.20
1.38 1.42 1.45
1.56 1.53
1.81*
2.01*
2.23*
2.45*
10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20
Apprenticeship spending
• Apprenticeship
spending will reach
£2.45bn in England by
19-20
• This is more than
double the amount
spent in 10-11*Forecast
Per year in England, £bn
• Scotland, Wales and Northern Ireland will receive a share of the levy, and will
take decisions on how that will be spent

4. Top 400 employers
There are around 170
public sector employers
in the top 400.
Many of the top 400
already recruit
apprentices, but around
35 have had no
apprentices in recent
years
Around 200 of these
employers had fewer
than 50 starts last
year

5. Comparison to current delivery
135
385
270
360
120180
255
115
235
620
Admin and Support Service
Education
Finance and Insurance
Health and Social Work
Information and communication
Manufacturing
Professional, Scientific and Technical
Public Admin and Defence
Wholesale and Retail Trade
Other
Total projected levy paid by sector in 17-18, £m Delivery by sector in 15/16

6. College delivery to employers
0
50
100
150
200
250
300
0-2 2-5 5-10 10-20 20-30 30-50 50-100 100+
Employercontracts
Number of apprentices per employer
Colleges Non-Colleges
• Employer delivery of more than 5 apprenticeships is
very limited
• Large employer deals on the whole delivered by non-
colleges

7. The detail

8. New in January 2017
• Consultation on IfA operational
plan
• SFA to release Provider and
Employer (released) contracts
• SFA released Further funding
guidance on apprenticeship
funding

9. Consultation on IfA – key points
• Very limited mention of the role of
providers
• The need for IfA to establish itself
as a trusted arbiter of quality
• The great potential provided by the
matching of the Skills Plan routes
with Apprenticeships

10. SFA Provider and employer contracts –
key points
• Provider:employer contracts need
to reflect the SFA contract(s)
• Are employers likely to be
developing parallel contracts too?
• SFA contract covers SFA, yours
needs to cover you!
• What are the consequences of non-
compliance?

11. SFA Funding Guidance – key points
• 2 sets, one for new starts and other
for continuing learners
• Published at the end of January
2017
• SFA currently playing with ‘off the
job’ definition
• Some concerns regarding eligible
costs
• Some changes re sub contracting

12. New in March 2017
• Outcomes of RoATP applications
released
• Outcomes of ITT for non-levied
employers to be released
• SFA : Provider contract to be
released

13. Developments in the Detail
• Contracts – workshops
• DAS becomes Apprenticeship
Service
• Levied employers can now access
AS
• Colleges should be registered as
both an employer and a provider
• IfA continues to form

14. So where are we now? (Feb 2017)
• ‘Trailblazer’ employer groups: approx. 230
• Standards published: 272 )
• Standards in preparation: 203) 475
• 159 Standards ‘approved for delivery’ (68)
• Of those approved for delivery (Feb 2017)
L2 L3 L4 L5 L6 L7
34 70 30 6 14 3
• No ‘standard’ approach to Standards!
• L6 and L7 defined as ‘degree apprenticeships’

15. The funding
within the
Levy
1 May 2017

16. The Levy from 1 May 2017
• Separate approaches for levied and non-levied employers
• Levied employers will work through the Apprenticeship
Service (formerly DAS) to access funding
• Non-levied employers will work directly with providers
to access funding
• The intent is for all employers to use AS at some point
• Standards and frameworks will be funded in the same
way
• All apprenticeships have been allocated to a funding
band
• Colleges have applied to enter a new apprenticeships
register and have undertaken a procurement to deliver to
non-levied employers

17. Funding bands
Every apprenticeship will be placed in a funding
band
• The upper limit of each funding band will cap the
maximum:
• amount of digital funds an employer who pays
the levy can use towards an individual
apprenticeship.
• price that government will ‘co-invest’ towards,
where an employer does not pay the levy or
has insufficient digital funds.
Employers can negotiate the best price for the
training they require
• If employers want to spend more than the funding
band limit, using their own money, then they will
be free to do that.
• Funding bands do not have a lower limit.
Number Band limit
1 £1,500
2 £2,000
3 £2,500
4 £3,000
5 £3,500
6 £4,000
7 £5,000
8 £6,000
9 £9,000
10 £12,000
11 £15,000
12 £18,000
13 £21,000
14 £24,000
15 £27,000

18. Non-levied employers
and
levied with no more in
account

19. Co-Investment
There are two types of employers who will benefit from government support
towards the cost of their apprenticeships training:
1. Employers who haven’t paid the levy and want to purchase
apprenticeship training from a provider
2. A levy-paying employer with insufficient funds in their digital account
to pay for the cost of training and assessment they want to purchase
We propose that:
• The government pays 90% of the costs of training and assessment.
• The employer will be responsible for paying 10% of the costs.
19
Government 90%
Employer 10%

20. Additional support 16-18 & 19-24 EHC and Ex Care
• Employers with fewer than 50 people working for
them will be able to train 16 to 18 year old and 19
– 24 year olds from care or with and EHC at no
cost to them
• All delivery to these two groups will also attract
£1000 for the employer and £1000 for the provider.
• For frameworks only, in transition, 20% of the
maximum funding rate will be added when the
framework is delivered to these two groups

21. Additional support for disadvantage
SFA have altered their stance on uplifts following
AoC lobbying. Rates are based on the Index of
multiple deprivation. The simplified system gives:
Three payment bands:
Top 10% = £600
10 – 20% = £300
20 – 27% = £200
The payment should equate to ‘at least’ the same
amount as is provided within the current approach.

22. Additional support English and maths and ALS
• Maths and English funded at £471 per
qualification delivered
• Additional Learner Support continues at
£150/month plus additional costs based on
evidenced need

23. Subcontracting within the Reforms
• Subcontracting is still permissible, but the main contractor
(previously the ‘Prime’) must ‘directly deliver some of the
apprenticeship training and/or on-programme assessment
associated with each employers apprenticeship programme’.
• Subcontracting must be clear in the provider : employer contract
which must cover the aspects that each provider will undertake.
• Main providers must undertake their own due diligence to ensure
their subcontractors are eligibile.
• No sub sub contracting is allowed
• You cannot start to subcontract if you have not subcontracted
before

24. Prior Qualifications
SFA have changed the rules here to allow
the funding of lower level apprenticeships for
those who are undertaking training that is
‘materially different’ from previous study or
apprenticeship. They will keep this under
review (12 month minimum study rule still
applies)

25. The Register of Apprenticeship
Training Providers (PQQ)
&
ITT for non-levy employers

26. Overall non-levied funding (ITT)
Minimum funding available in total: £ 440 million (over 15 months)
Total ring fenced into:
16 to 18: £213 million
19+ : £227 million
Maximum initial contract value: £ 5 million
Minimum initial contract value : £ 100,000
Scores gained will be used to prioritise contract awards
Values contracted can be increased or decreased and the period
could be extended by up to one year

27. RoATP and ITT applications
RoATP
Main Route 1753
Employer-provider 238
Support provider 336
ITT
Total responses 1310
Outcomes known ‘early’ March 2017

28. Next steps for RoATP and Procurement
• March 2017 – results of PQQ and ITT known
• April 2017 – levy starts
• May 2017 - Levy funded delivery starts

29. The Apprenticeship
Service (formerly DAS)

30. 30
The Digital Apprenticeship Service
NOTE
Employers who don’t pay the levy will not need to use the digital apprenticeship service to pay for apprenticeship
training and assessment until at least 2018. When we ask them to start using the digital apprenticeship service to pay for
apprenticeship training, we will help them to prepare.

31. Apprenticeship
Provider Readiness

32. 32
Will you be
ready when the
apprenticeship
reforms
commence from
May 2017?
Organisational
strategy
Contracts
Systems and
data
Funding rules
and
compliance
Finance
Curriculum
Marketing
Apprenticeship readiness

33. 33
Organisational strategy
You have developed and implemented an organisational strategy for
implementing the apprenticeship reforms
Staff have a good understanding of the new apprenticeship system and
your organisational objectives
Learning and development plans have been developed and your
organisation has accessed toolkits and support available to the sector
You have examined your governance arrangements and considered
whether these are fit for purpose
?
?
?
?

34. 34
Funding Rules and compliance
The level of knowledge of the funding rules (from 1 May 2017) within
your organisation
Internal compliance processes have been re-engineered to reflect the
new funding system
Arrangements for collecting and reporting mandatory employer
contributions are in place
?
?
?

35. 35
Curriculum
Your organisation are involved in trailblazer groups or understand how
to get involved
You have developed a strategy for conversion of all of your frameworks
to standards with a clearly defined timetable and have the staffing
expertise to deliver standards
Your employer engagement strategy includes offering standards where
approved for funding
?
?
?

36. 36
Marketing
What percentage of your apprenticeships delivery do you anticipate
being through levy paying
You have an employer engagement strategy for levy paying employers
You have an employer engagement strategy for non-levy paying
employers
Marketing materials have been designed to reflect the new
apprenticeship system
Small and medium sized enterprises you work with understand the new
co-investment system
?
?
?
?
?

37. 37
Finance
You have assessed the impact on your income levels as a result of the
changes to apprenticeship funding
You have calculated potential funding for individual frameworks and
standards based on the published bands and prices you might
negotiate with employers
You have planned for variations in income as a result of the
publication of the new funding bands, including implications around
cash flow, investment requirements, VAT and credit control
You have developed systems to manage multiple funding systems for
apprenticeships from May 2017
?
?
?
?

38. 38
Systems and data
You have systems which are able to accurately report apprenticeship
activity to the SFA through the ILR on a monthly basis
Your organisation has submitted its apprenticeship offer to the course
directory so it is visible to employers, and knows how this information
will be kept up to date
Access arrangements for the Digital Apprenticeship Service have been
arranged and staff are familiar with its functionality
?
?
?

39. 39
Contracts
You have internal systems developed which will enable you to contract
with levy paying employers
Existing sub contracting arrangements have been reviewed and refined
in line with the funding rules
Systems for contracting with the End Point Assessing organisations
have been developed
?
?
?