Apprenticeships now and the proposed plans going forward

Apprenticeships being Delivered

More than half (55%) of all apprenticeship starts in 2014/15 were in two sectors: Business, Administration & Law and Health, Public service & Care. Including Retail & Commercial Enterprises, the top three sectors made up almost three-quarters (73%) of apprenticeship starts

Key Facts

• There were 499,900 apprenticeship starts in the 2014/15 academic year, 59,500 (14%) more than the previous year.

• The Top 3 Frameworks being:• Health and Social Care 85,000• Business Administration 49,000• Management 43,000• In 2014/15, 21,500 (4.3% of all starters) apprenticeship

starters were Asian/Asian British; 17,200 (3.5%) were Black/African/Caribbean/Black British; and 10,900 (2.2%) were of mixed/multiple ethnic background.

So What Next for Apprenticeships?The Government Requires

The boosting our nation’s productivity to maintain and consolidate our economic recovery by:• Raising skill levels through apprenticeships – reaching 3 million starts in 2020.

• That is equivalent to more than one apprentice every minute over the next four years

• Putting employers in the driving seat of creating apprenticeships that fully meet their business needs.

• This means we NEED to develop opportunities for Engaging Employers

At Every Opportunity • Making sure that apprenticeships are open to all, with a 20% increase in BME

apprentice starts in 2020.• Continue and Build on our BME • To increase sector coverage with an emphasis in Science, Technology, Engineering, and

Mathematics (STEM) apprenticeships- this being reflected in their funding model

WHY? Rationale for ReformsRationale 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 and delivery comparisonThe 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

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 £289.60Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60Pearson BTEC Level 2 Diploma in Business Administration ( QCF) £4,270.97 £1,991.50 £1,593.20Drawdown £5,823.66 £2,715.50 £2,172.40Total 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 £289.60Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60Pearson BTEC Level 2 Diploma in Customer Service ( QCF) £3,594.35 £1,676.00 £1,340.80Drawdown £5,147.04 £2,400.00 £1,920.00Total 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 ExampleProposed 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

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

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

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

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 £2,000Employer Pays £200+VATGovernment Pays £1,800

Funding Comparison The Hard Facts

Business Administration Level 2How it is

NowPost April

2017English £475.98 £471.00Maths £475.98 £471.00Diploma in Administration £2,618.56 £2,000.00Uplift (Average) £357.05 £0.00Drawdown £3,927.57 £2,942.00Loss of Funding £985.57Income Reduction 25%Awarding Body Fee -£175.00 -£150.00End Point Assessment £400.00Left for Delivery of Training £4,102.57 £2,692.00Loss of Funding Going into Training £1,410.57

Drop in Funding Available for Training (average)

34%

Customer Service Level 2How it is

NowPost April

2017English £475.98 £471.00Maths £475.98 £471.00Diploma in Customer Service £2,203.72 £1,500.00Uplift (Average) £315.57 £0.00Drawdown £3,471.25 £2,442.00Loss of Funding £1,029.25Income Reduction 30%Awarding Body Fee -£175.00 -£150.00End Point Assessment £300.00Left for Delivery of Training £3,646.25 £2,292.00Loss 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 off an age grant for this group (SMEs Only) . (Although we can not confirm all the eligibility criteria at this stage)

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

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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

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

• 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

• 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 delver the qualification how will this be assessed and how this fits in to your business needs

Keep in Touch:

• https://uk.linkedin.com/in/safaraz• https://www.linkedin.com/company/pathwaygroup

• https://www.facebook.com/pathwaygroup/

• @pathwaygroup @SafarazAli

Safaraz Ali (Saf)Safaraz@pathwaygroup.co.uk

Telephone: 0121 707 0550