Youth Employment Convention

Apprenticeship Reform and the

implications

Teresa Frith

November 2016

Content

• Main aims

• Apprenticeship Spending and Levy

• Detail

• Key implications

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

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

Comparison to current delivery

Total projected levy paid by sector in 17-18, £m Delivery by sector in 15/16

Implications and

Considerations

Key Implications

• Less direct funding

• A more commercial approach

• Priority shift to employers

• Success measured by progression?

• (3 million target)

• Less government influence

• Changing opportunities and threats

Key Considerations

• strategic direction and mind set

• relationship with employers

• external LMI

• internal MI

• staff skill sets

• curriculum offer and resources

• relationship with key stakeholders

• communications

• preparing potential apprentices

The detail

The Detail as we know it

• Government’s 2020 vision

• Key changes from ‘SASE’

• Current position

• Levy funding for 1 May 2017

• RoATP

• Apprenticeship governance

Government’s 2020 vision

• 3 million! (a lot less talk of this since change in Govt)

• Quality and recognition of Apprenticeships

• Funding

• Public Sector (statutory 2.3% of workforce)

• Small Businesses (remove barriers to allow growth)

• Larger Employers (increase investment)

• Marketing and communications

• Careers advice and guidance

• Provider Readiness

• System Governance

• Higher and Degree

So where are we now? (Oct 2016)

• ‘Trailblazer’ employer groups: approx. 180

• Standards published: 258 )

• Standards in preparation: 166 ) 424

• 147 Standards ‘approved for delivery’

• Of those approved for delivery (June 2016)

L2 L3 L4 L5 L6 L7

33 64 27 5 15 3

• No ‘standard’ approach to Standards!

• L6 and L7 defined as ‘degree apprenticeships’

The funding

within the

Levy

1 May 2017

The Levy from 1 May 2017

• Separate approaches for levied and non-levied employers

• Levied employers will work through the Digital

Apprenticeship Service (DAS) to access funding

• Non-levied employers will work directly with providers to

access funding

• The intent is for all employers to use DAS at some point

• Standards and frameworks are funded in the same way

• All apprenticeships have been allocated to a funding band

• Providers have now applied to RoATP and have undertaken

procurement with SFA to deliver to non-levied employers.

Funding bands

Every apprenticeship has been 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

Levied Employers from 1 May 2017

• Levied employers make up 2% of the employer base

• There are approximately 22,000 levied employers

• All employers are in scope of the levy, only those who have

a pay bill in excess of £3m pa will pay due to a £15,000 tax

allowance

• The levy is set at .5% of total pay bill, minus the allowance

• Levy will be deducted monthly by hmrc

• Levied employers can access their payments (plus 10%)

through their digital account on DAS

• Funding can only be used to pay for the delivery and

assessment of government recognised apprenticeships

Non-levied employers

and

levied with no more in

account

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.

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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

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.

Currently only for transition period

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

Subcontracting within the Reforms

SFA have determined not to make major

alterations around sub-contracting for the

time being, but this is not likely to continue

past the transition period.

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)

The Register of Apprenticeship

Training Providers (PQQ)

&

ITT for non-levy employers

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

Next steps for RoATP and Procurement

• December 2016 - Further employer guidance from HM Revenue

and Customs (HMRC) on how to calculate and pay the

apprenticeship levy

• January 2017??

• February 2017??

• March 2017 – results of PQQ and ITT known

• April 2017 – levy starts

• May 2017 - Levy funded delivery starts

Apprenticeship

Provider Readiness

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Will you be ready when the apprenticeship

reforms commence from

May 2017?

Organisational strategy

Contracts

Systems and data

Funding rules and

complianceFinance

Curriculum

Marketing

Apprenticeship readiness

Transition Planning

• Overarching college strategy

• Systems Policies and procedures

• Financial modelling and systems

• Business development, target market(s)

• Marketing and communications

• Partners, subcontractors, stakeholders

• People, skills and resources

• Curriculum design

• Approach to end point assessment

• Pre-apprenticeship activity

• Apprenticeship progression

• External and internal QA

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Questions?