A funding update for ApprenticeshipsMay 27th 2010, BTEC Apprenticeship launch event

Nick LinfordHead of the Pearson Research Institute

Content of the presentation> Investment for 2010-11 and changes this week> Investment for 2010-11 compared to 2009-10> Apprenticeship national funding rates> Further reductions to 19+ apprenticeship rates> Apprenticeship demand and ‘the 16-18 problem’> Summary and what next> Bedtime reading

£0£200m

£400m

£600m

£800m£1bn

£1.2bn

Appren 16-18 Appren 19+ Train to Gain

Original 2010-11 budgetAnnounced this week

+ £150m(+38%)

- £200m(-20%)

Investment for 2010-11 and changes this week*

* Financial year Apr-Mar (England)

£50m forFE capital

Investment for 2010-11 compared to 2009-10

* Financial year Apr-Mar (England)

£0£200m

£400m

£600m

£800m£1bn

£1.2bn

Appren 16-18 Appren 19+ Train to Gain

+ 16%

+ 50%

- 15%

2009-102010-11

Apprenticeship national funding rates

£1,000

£1,500

£2,000

£2,500

£3,000

£3,500

16-18 19-24 25+

2009/102010/11

£2,8

17

£2,5

35

£2,9

20No change

£2,9

20

£2,7

32

- 3%

£2,1

86

- 14%

Further reductions to 19+ Appren rates*> All 19+ Appren co-funded, so funding halved> Additional 25% reduction for large employers

> 2010/11 rates will apply to all payments from Aug ’10, even if employee started in 2009/10

Comparing rates (extreme example):

16-18 25+ large employer

£2,920

£82072% lower rate

Expected that employer contributions plug much of this funding gap

* See Skills Funding Agency guidance note 3

Apprenticeship demand and ‘16-18 problem’

25+

19-24

16-18 - 7%

- 6%

+ 106%

0

20,000

40,000

60,000

80,000

100,000

120,000

2005/06 2006/07 2007/08 2008/09

Apprenticeship starts by age and year*

* Source : March 2010 Statistical First Release

No change since

2005/0613% increase

since 2005/06

“Apprenticeship starts have increased to a record 240,000 in 2008/09”….but……

Gov. planned

29k and got 56k

So how is this year (2009/10) going?

* Source : March 2010 SFR, 2009/10 figures provisional

25+

19-24

16-18Apprenticeship starts by age (01/08/09 – 31/01/10)*

-2%

+14%

-35%

Clearly concern is 16-18, with 7% fall in starts for 2008/09, and 2% less for first half of 2009/10*

010,00020,00030,00040,00050,00060,00070,00080,000

2007/08 2008/09 2009/10

Summary and what next

> Rate reductions for 19-24, 25+ and large employers

> Too little demand for 16-18 and too much (?) for 25+

> SFA meeting UKCES today to discuss:

• Timetable for publishing QCF and framework rates

> New Gov. increasing 2010/11 Appren allocations for SMEs

> Rate reductions from Aug ’10 include carry-in learners

• Timetable for SASE compliant frameworks

• Rate setting arrangements to avoid bottleneck

Bedtime reading for Apprenticeships

“Full Delivery Plan will be published in July, and will incorporate any changes that the new government intend to make to policy for academic year 2010/11”

SFA Guidance

Note 3

Earned Autonomy

SFA weekly update 8

Oh, and my hands-on guides!

www.fundingguide.co.uk

www.dataguide.co.uk

Thank you

Find out more about the Pearson Research Institute visitwww.pearsonresearchinstitute.com

P.S. Visit www.pearsonresearchinstitute.com to sign-up for the Train to Gain and Apprenticeship Funding Masterclasson 29th June 2010 in London