Apprenticeships in action –

what does the levy mean for

you?

20/09/2016

Stefan Cecchini

Head of Projects NCfN.

Apprenticeship Change

What four?

Four years so far In June 2012 Doug Richard was asked by the government

to review apprenticeship content and funding

Four skills ministers so far

Four consultations so far

July – Oct

2013

Nick Boles

took over July

2014

Robert Halfon

Took over July

2016

John Hayes

Matt

Hancock

took over

Sept 2012

Mar – May

2014

Aug – Oct

2015

Aug – Sept 2013

Four Big key changes:

• All frameworks to be replaced by standards

Key changes: Standards are being designed by employer groups, require an endpoint-

assessment and often don’t require any qualifications. Frameworks being

switched off in phases through to 2019/20. Register for workshop

with the SFA via

• National funding rates replaced by ‘negotiated’ rates Key changes: From April 2017 the SFA will no longer determine apprentice funding values

using a formula. Instead, providers and employers will negotiate a level of subsidy within

one of 15 upper limits.

• Extra £1bn for apprenticeship via a levy Key changes: From April employers will pay an extra 0.5% of their payroll above £3m into

their levy pot. It’s expected this will generate £2.5bn per year for England and providers

will access this pot via a new Digital Apprenticeship System.

• A 90% subsidy when the employer levy pot is empty Key changes: If an employer has no levy pot (98% of employers) or it runs out, the SFA are

consulting on paying 90% of the negotiated rate on condition the employer has paid 10% in

cash first. In the pilot, running since 2014, the subsidy was only 67% once 33% paid in cash

first (concern over introduction of a mandatory cash contribution).

What’s the reform really for?

Reforms intended to be the solution to the problem of a lack of employer demand

Employer demand will go up as they will ‘be in the driving seat’ and have ‘ownership’ of:

• The content & assessment (standards)

• The funding (levy, fees and negotiation)

• The oversight (Institute for Apprenticeships)

Frameworks v Standards

‘New’ delivery model?

2 Page standard Mandated qual. Maths &English

Assessment Plan

Detailed assessment information

Agree model(s)

of delivery, price &

payment schedule with

employer *

Recruitment

Recruit Apprentice

IA/ IAG

Varying models

ILP critical to

success

Potential for delivery without

qualifications

Formative assessment

Maths English

Graded synoptic testing Conducted by an

Assessment Organisation (not the on-programme

provider)

Occupationally competent person with

relevant professional/

trade body membership

Opportunity for

progression

Inputs Negotiation On-programme End Assessment Outputs

What is the Apprenticeship Levy?

• With other reforms, will fund apprenticeships from April 2017.

• Applies to all UK private & public sector organisations.

• Monthly Paybill > £250k

(£1,250 allowance)

• 10% top-up from government,

applied monthly

What the levy can be used for

Funds can be used for:

apprenticeship training and assessment

(with approved training provider and assessment organisation)

Funds CANNOT be used for: • wages

• statutory licences to practise

• travel and subsidiary costs

• managerial costs

• traineeships

• work placement programmes

• the costs of setting up an apprenticeship programme

Apprentices accepted on an apprenticeship before April 2017 will be funded

for the full duration under the conditions in place at the time their

apprenticeship started. If you pay the levy you will not be able to use the

funds in your levy account to pay for these apprenticeships.

Digital Apprenticeship Service

An online service for employers of all sizes,

for the management of Apprenticeships,

including:

Information

Finding a standard, framework and training provider

Recruiting apprentices

Managing levy and funding

The Institute of Apprenticeships

Purpose :

• To over see the design and delivery of high quality apprenticeships

• A new independent body led by employers

• A long-term governance arrangement to support employers to uphold the high

quality of apprenticeship standards and

• Be able to respond to the changing needs of business.

Remit :

• Regulate the quality of apprenticeships within the context of reaching 3 million

starts in 2020.

• Lead the process of creating and approving apprenticeship standards and

assessment plans

• Advise on setting funding caps

Timeline:

• Shadow organisation established in 2016, Fully operational from April 2017

Now even more changes…..

August 16 Update

• Proposed new funding system comes in 1st May 2017 (ready for

payments to be made the following month)

• Move from 6 to 15 new funding bands, ranging from £1,500 to £27,000

• Single rate of funding for all apprentices, regardless of age, based on

funding band allocated to each framework or standard

• Small employers (<50 employees) will pay NOTHING towards 16-18

apprenticeship delivery. Government fully fund 100%.

• ALL employers will receive a £1,000 incentive when they take on a 16-

18 apprentice

• There will also be an additional £1,000 paid to the training provider to

support a 16-18 apprentice

August 16 Update

• Current frameworks will be moved to be funded at their nearest equivalent

funding cap band, based on their current fully rate of funding for adult

apprentices

• STEM framework pathway funding levels will be increased by 40% for level 2

and 80% for level 3. There are thirteen sector subject areas. • Uplifts apply to: Engineering and Manufacturing Technologies; Information and Communication

Technology; Science and Mathematics; and Construction, Planning and the Built Environment.

• Eligibility rules update. Employers can use funds to: • train anyone at a higher level than a qual they currently hold

• train people at a LOWER LEVEL if the apprenticeship will allow the individual

to acquire substantive new skills and content of training is materially different from any

previous training/apprenticeship.

• If an apprenticeship finishes early, so do the payments

• 20% of total funding to be held back until final payment, to cover for assessment costs.