APPRENTICESHIP REFORMS FACTSHEET

MAY/JUNE 2016

Make sure you’re up to speed on the apprenticeship reforms affecting businesses across the UK.

‘TRAILBLAZER STANDARDS’The Government has committed to growing apprenticeships with a target of 3million by 2020. The apprenticeship reforms are currently being trialled through new employer-led apprenticeship standards.

Public bodies are also required for 2.3% of the workforce to be comprised of apprentices.

WHY? RATIONALE FOR THE REFORMS

THE GUIDING PRINCIPLES OF THE REFORM ARE:• Employer-led apprenticeship standards that

meet their needs• Simplify current funding system• Secure more effective training by changing

funding to employers• Provides freedom and flexibility for

employers

EMPLOYER BENEFITS:• Apprenticeship content will be exactly what you

need• Ensure you are getting value on your

investment when working with your training provider

• Access to higher and degree level apprenticeships

• Ensure that at the end of the apprenticeship your apprentice is competent in the role you need them to do

EMPLOYER DRIVENEmployers designing

apprenticeships to make them more responsive to their needs and the future economy, and

controlling funding

SIMPLICITYSimplifying apprenticeship standards so that they are

shorter and more accessible

QUALITYImproving the quality of

apprenticeships so that they are viewed with the same

esteem as University

APPRENTICESHIP REFORM FACTSHEET

TRAILBLAZER FUNDING MODELA new, independent body is being established by Government which will regulate the quality of apprenticeships, advise on setting funding caps, whilst approving apprenticeship standards and assessment plans. The body will be fully operational by April 2017.

*correct as of May 2016

FRAMEWORKS V STANDARDSCURRENT APPRENTICESHIPS NEW APPRENTICESHIP STANDARDS

• Qualification-based framework, informed by employer feedback

• Extensive requirements

• Jargon-heavy structure

• English & maths qualifications

• ERR and PLTS requirements

• Portfolio and qualification-dependent assessment methods

• Continuous on-programme assessment

• Knowledge and competence elements separately assessed

• Apprenticeship completion on achievement of qualifications

• Not always linked to professional registration requirements

• Outcome-based, employer-defined standard and assessment

• Small number of government criteria

• Plain English standard

• English and maths qualifications

• No ERR or PLTS requirements

• Employer-specified on-programme assessment approach

• End-point assessment

• Synoptic, or combined, assessment

• Graded apprenticeship achieved if fully competent at end of training – with some solely pass/fail exceptions for some industries

• Must meet professional/trade body registration requirements

Maximum core government contribution (£2 for every £1 from employer)

CAP 1 CAP 2 CAP 3 CAP 4 CAP 5 CAP 6

£2,000 £3,000 £6,000 £8,000 £13,000 £18,000

Employer contribution if the cap maximum is required £1,000 £1,500 £3,000 £4,000 £6,500 £9,000

Co-payment for training and assesment if the cap maximum is required

£3,000 £4,500 £9,000 £12,000 £19,500 £27,000

Additional incentive payments

Recruiting a 16-18 year old £600 £900 £1,800 £2,400 £3,900 £5,400

For a small business (<50) £500 £500 £900 £1,200 £1,950 £2,700

For successful completion £500 £500 £900 £1,200 £1,950 £2,700

Maximum total government contribution £3,600 £4,900 £9,600 £12,800 £20,800 £28,800

MAY 2016WWW.TRAINING2000.CO.UK

FM/MK 400/01 Feb 2015_M455 ©Copyright Training 2000 LtdTraining 2000 Ltd is a company limited by guarantee. Registered in England: 2380675 Registered Charity: 701770

For more information or to enquire about booking a place: www.training2000.co.uk, email reform@t2000.co.uk or call 01254 54659

APPRENTICESHIP LEVYDuring the Summer Budget in March 2015, Chancellor George Osborne announced the introduction of an Apprenticeship Levy – as part of the Government’s drive to create 3 million apprenticeships in England by 2020.

If you have an annual pay bill less than £3 million you will continue to have access to Government funding – all employers will have access to the new Digital Apprenticeship Service regardless of whether they are contributing to the Levy or not.

WHAT WILL THE FUNDING CAPS BE?Yet to be announced, these will limit the amount of funds an employer can spend on the training of an individual apprentice, and will vary dependant on the level and type of apprenticeship. The higher levels and more expensive training is likely to be capped higher – the funding caps for 2017/18 will be announced later in 2016.

WHAT YOU NEED TO KNOW• Set to be introduced in April 2017• Paid via Pay As You Earn (PAYE)• Levy charged at 0.5% of employers pay bill• Each employer receives a £15,000 allowance

– meaning levy will only be paid on annual pay bills in excess of £3 million.

• Employers in England will be able to reclaim their contributions and choose training providers via a voucher system, through the new Digital Apprenticeship Service.

• The Government will apply a 10% top-up to monthly funds – so every £1 will be increased to £1.10 in value

• After a certain amount of time – yet to be decided – unused levy funds will be reallocated to other employers

• Employers who operate multiple payrolls will only be able to claim one allowance for the levy

INDIVIDUAL VOUCHER

ACCOUNTSEMPLOYERS

PROVIDERS

APPRENTICESHIP FUNDING

APPRENTICESHIP DESIGN

HMRC COLLECT LEVY

LARGER EMPLOYERS

Digital Payment

Funding claim and proof of training

Pay

men

t m

ade

to p

rovi

der

s

Money flow

Infomation flow

HOW THE LEVY WILL WORK

Employer of 250 employees, each with a gross salary of £20,000

Paybill: 250 x £20,000 = £5,000,000

Levy sum: 0.5% x £5,000,000 = £25,000

Allowance: £25,000 - £15,000 = £10,000

Employer of 100 employees, each with a gross salary of £20,000

Paybill: 100 x £20,000 = £2,000,000

Levy sum: 0.5% x £2,000,000 = £10,000

Allowance: £10,000 - £15,000 = £0 annual levy payment

EXAMPLE ONE

EXAMPLE TWO

I WON’T PAY THE LEVY - HOW WILL THIS AFFECT MY BUSINESS?