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Apprenticeship Reforms in England November 2016

Apprenticeships in Scotland

 Scottish Government Ambition for Apprenticeships  Scottish Government Consultation on Apprenticeship Levy  Scottish Apprenticeship Advisory Board  Scottish Apprenticeship Family  HMT Announcement on Apprenticeship Levy ecitb.org.uk

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Apprenticeships in Scotland The announcement delivers the UK government’s commitment to provide the devolved administrations with a fair deal, which will be based on population share . Skills policy is devolved and, as set out in the table below, this deal will provide the devolved administrations with a population share of the Office for Budget Responsibility’s latest apprenticeship levy forecast (published in March 2016). Population share of levy 2017-18 funding (£m)

2018-19

2019-20

Scottish Government

221

230

239

Welsh Government

128

133

138

Northern Ireland Executive

76

79

82

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Department for Education delivered information November 2016

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What is the apprenticeship levy and who pays it?

Starts on 6 April 2017, at a rate of 0.5% of pay bill, paid through PAYE Applies to all UK employers in all sectors £15,000 allowance is not a cash payment Only 2% of employers will pay the levy 5

Accessing levy funds to spend on training • Levy funds will be available through a new digital service on gov.uk • First funds appear in account in late May 2017 How funds in the account will be calculated If 100% of pay bill is in England If 80% of pay bill is in England

100% of levy payment in digital account 80% of levy payment in digital account

• 10% government top up to monthly funds entering an account

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What about non levy payers? 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 who with insufficient funds in their digital account to pay for the cost of training and assessment they want to purchase

Government 90% Employer 10%

• •

The government will pay 90% of the costs of training and assessment. The employer will be responsible for paying 10% of the costs. 7

Purchasing training – both groups New funding system comes into effect on 1 May 2017 Apprenticeships started before 1 May will be funded through to completion according to the existing rules Levied employers buying training from May 2017 • • • •

Can commit to apprenticeship starts from the beginning of May Funds will automatically leave the digital account on a monthly basis The cost will be spread over the lifetime of the apprenticeship We will hold back 20% of the total cost, to be paid on completion of the apprenticeship.

Non-levied employers buying training from May 2017 • Continue to make payments direct to providers • Move onto the digital system at a later date 8

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Key changes since August In August, we published our proposals for apprenticeship funding. Since then, we have been listening to employers, training providers and other stakeholders to help us develop our final position. The adjustments we have made will help ensure that the reforms benefit more employers and apprentices. Proposals in August

Final funding policy

Expiry of digital funds after 18 months

Extended to 24 months – helping employers to prepare for the new system and to adapt training programmes

Support for 16-18 year old apprentices £1000 payment to employers and training providers

Retaining the £1000 payments plus extra government funding to provide a transitional 20% uplift for providers training 16-18 year olds on a framework. Also applies to 19-24 year olds formerly in care or have a Education and Health Care plan

Removal of disadvantage uplift

Retain a simplified version of current system for one year to support those from disadvantaged areas whilst review best way to support disadvantaged groups

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Funding bands for standards Apprenticeship standards are employer-designed and offer employers and apprentices a more robust and relevant training experience.

Recognised in the funding system by allocating higher funding bands to apprenticeship standards, relative to equivalent frameworks, where appropriate. Existing apprenticeship standards have been allocated to new funding bands according to the following principles: Principles • Lower cost standards should be allocated to the nearest funding band • Those standards currently assigned to the widest and highest cost funding band will be allocated to a new band within this range. Taking into account: • Actual prices employers have negotiated with providers. • Evidence from Trailblazer employers on the estimated costs eligible apprenticeship training • The funding bands set for equivalent frameworks • The level and nature of the training, and consistency across similar types of apprenticeship standard. 10

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Funding bands Number

Every apprenticeship will be placed in a funding band The upper limit of each funding band will cap the maximum:

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

• amount of digital funds an employer who pays the levy can use towards an individual apprenticeship. • that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds to pay 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.

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Additional support Disadvantaged young people

16-18 year olds Government will pay £1,000 to employers, and a further £1,000 to training providers if they train a 16-18 year old apprentice

Government will pay £1,000 to employers, and a further £1,000 to training providers if they train 19-24 year olds leaving care or who have a Local Authority Education and Healthcare plan

Small Employers Employers with fewer than 50 employees will have 100% of the training and assessment costs covered when training a 16-18 year old (or 19-24 year old formerly in care or has a Local Authority Education, Health and Care plan

Additional learning support We will pay training providers up to £150 a month to support these learners, plus additional costs based on evidenced need

English and Maths training To meet minimum standards of English and maths we will pay training providers £471 for each of these qualifications (Level 1 and 2)

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Funding rules Cross-border funding Applying a single test for funding through the English system: based on whether the apprentice’s main place of employment is England. ‘Workplace’ is where the apprentice is expected to spend the majority of their time during their apprenticeship.

Transferring funding During 2018 we will introduce means for employers to transfer up to 10% of the levy funds to another employer with a digital account, or to an ATA.

Prior qualifications Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold. From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills

New employer steering group to design this system so that it meets their needs

What can funds be used for? Digital funds and government funding can be used for:

Digital funds and government funding can not be used for

• apprenticeship training and assessment

• wages

• against an approved framework or standard

• managerial costs

• with an approved training provider and assessment organisation

• work placement programmes

• up to the funding band maximum for that apprenticeship

• travel and subsistence costs • traineeships • the costs of setting up an apprenticeship programme

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10% Top up

HMRC collect levy (PAYE)

Employer views funds in digital account to spend in England

Government

Training Provider

Non-levied employer

Levy paying employer

How the funding system will work

Registers with SFA

Employs apprentice and commits to training

Receives training for apprentice

Payments to providers taken from digital account

Employs apprentice and commits to training

Receives training for apprentice

Employer pays for proportion of cost direct to training provider

Commits to provide apprenticeship training

Provides training to apprentice

Provides info via ILR to SFA that training has taken place & that employer has made contribution

Pass data on levy payments from HMRC to DfE Employer and Provider Identity Assurance

Timely data on training

Check training is complete

Unused funds expire after 24 months

SFA pays govt proportion of costs to the training provider

Paid by SFA and balance by employer

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Information from Skills Funding Agency about end point assessment contracts

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Working with levy-paying employers Employer A

Employer B (C,  D, E …) Subcontractor, if  selected

Contract for  Service  Contract for  Service 

Provider Agreement Skills Funding  Agency

Apprenticeships – employer  A

Provider

Apprenticeships – employer B (C, D, E…)

Payment  contract

All providers need to be listed on the  Register of Apprenticeship Training Providers

End‐point  assessment  organisation  (standards only)

Working with employers that do not pay the levy End point  assessment  organisation (standards only)

Employer 

Skills Funding  Agency

Provider Contract for service

Contract for  Service 

Subcontractor, if  selected

Any provider wishing to work with employers who do not pay the levy must:  • be listed on the Register of Apprenticeship Training Providers and  • have successfully completed an invitation to tender to work with employers that do not pay the levy

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Contracts Once a provider has been selected by an employer to deliver training to their apprentices, they need to negotiate costs and ensure contracts are in place so that the funding can flow. The costs for any end point assessment will be included in the total price for the apprenticeship agreed with the employer. Providers will be required to pass this agreed amount on to the assessment organisation selected by the employer.

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What is the digital apprenticeship service?

National Apprenticeship Service

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What is the digital apprenticeship service?

National Apprenticeship Service

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What is the digital apprenticeship service?

National Apprenticeship Service

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Recruit an apprentice

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gateway.gov.uk

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Key milestones 2016 October

• • • • •

Publish funding bands that apply in the new system Full set of technical rules that underpin the funding system Calculation for English proportion Pilot testing with employers Register of Apprenticeship Training Providers open

November December

• Further employer guidance from HMRC on how to calculate and pay the apprenticeship levy

Key milestones 2017 and on January

• Employers to register on the digital apprenticeship service

February March

• National Apprenticeship Week (6 to 10 March)

April

• Levy paid

May

• Service live • Make levy commitments

To 2020

• All employers to use the service

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Apprenticeship Standards

List of all apprenticeship standards currently available

https://www.gov.uk/government/publications/apprenticeship-standards-list-of-occupations-available

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Funding bands for apprenticeship frameworks from May 2017 www.gov.uk/government/publications/apprenticeship-funding-from-may-2017

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Funding for Engineering Construction apprenticeship frameworks

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Apprenticeship standards: funding bands from May 2017

List of apprenticeship standards approved for delivery

There are two sets of bands below; bands for starts up to and including 30 April 2017 and bands for starts from 1 May 2017. The new apprenticeship funding system comes into effect from 1 May 2017. The bands for starts up to and including 30 April 2017 reflect the new 6 bands in 2016/17, previously there were 5 bands in 2015/16

All standards remain in the same band in 2016/17 as they were in 2015/16 except for those in the highest band 5 which have been moved to the highest band 6 in 2016/17.

For starts up to May 2017 Sector

Apprenticeship standard

Level

Published

Funding LARS Band code for providers only

Funding band maximum

Maximum government funding

For starts from May 2017 Funding Band

Funding band maximum

Non-destructive Testing

Non-destructive Testing Engineering Technician

3

01-Dec-15

67

6

£27,000

£18,000

12

Non-destructive Testing

Non-destructive Testing (NDT) Operator

2

22-Aug-16

132

4

£12,000

£8,000

10

£18,000 £12,000

Nuclear

Nuclear Welding Inspection Technician

4

27-Aug-15

35

4

£12,000

£8,000

10

£12,000

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End Point Assessment Information for employers looking for an independent end-point assessment organisation and potential applicants to the register of apprentice assessment organisations. https://www.gov.uk/government/collections/register-of-apprentice-assessment-organisations As at the end of October 2016 only 21 assessors are on the register including Bradford University who are offering a high level assessment service. Types of end point assessment can include: Practical tests Multiple choice tests Professional interviews with Institute body Qualifications Risks: Unintended consequences of the change include: • Are there enough high quality assessors • How does the Institute of Apprenticeships ensure comparability of levels across all industry types ensuring a level 3 in all professions is at a similar level of competency ecitb.org.uk

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Register of apprentice assessment organisations www.gov.uk/government/publications/using-the-register-of-apprentice-assessment-organisations

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Example of the register for end point assessment organisation for NDT standards

EP_Assessment_Organisations Contact_Name Contact_aContact_nContact_eDelivery_ADelivery_ADelivery_ADelivery_A British Institute for Non‐DestruRoger Lyon  Northamp01604 8938apprenticeEast MidlaEast of EngLondon North East

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Example of how the system works

Example; The employer wishes to recruit a trainee NDT technician. Apprentice in May 2017. Apprentice NDT technician is in Band 15, so upper limit for training would be £27000. The employer would be able to negotiate the cost of the training with the training provider.

Example; The NDT company have a wage bill of £4 million per year. 0.5% of this is £20,000, and £15,000 is offset. So the levy paid per year will be £5,000. This will be paid through the PAYE system to HMRC. The employer will have £5,000 in their digital account The NDT training will cost £27,000, and the employer has negotiated the cost to £25,000 with the training provider. £25,000 - £5,000 = £20,000 (The employer will now be able to access the 90% top-up funding for the £20,000 so the employer will need to pay £2000 only). The apprentice is 17 years old, so the employer and training provider will each receive back £1000 from the Government. ecitb.org.uk

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Examples of None Levy payers

An NDT company wishes to take on an apprentice NDT Technician in May 2017, has 10 members of staff and a pay bill of under £1 million. The training is negotiated at £25000 with the training provider. As the employer is an SME employing under 50 people if they employ a 16-18 year old it would be fully funded. If they employ a 20 year old the employer can arrange to pay 10% (£2500) directly to the provider. If the employer then finds a young person who is a 20 year old ‘Care Leaver’ and perfect for the job. The training is then fully funded for the apprenticeship. The employer will also receive £1000 for taking on a young ‘Care Leaver’ and £1500 Age Grant, providing it is a new apprenticeship.

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Considerations when choosing an training provider 1 What are the apprenticeship achievement rates at a chosen training provider? • Look at the 2014 to 2015 (published April 2016) apprenticeship NART overall institution report https://www.gov.uk/government/statistical-data-sets/sfa-national-achievement-rates-tables-2014-to-2015 2 What are the apprenticeship progression rates? • How many apprentices stay with their employer? What % go on to secure promotion, added responsibility or undertake higher learning? Anything below 66% suggest the impact on the provider is limited. 3 What rating does the training provider have for employer satisfaction? • The annual survey of all existing employers with apprentices will show where companies are happy or unhappy with their providers. A low satisfaction should make you wary. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508526/Employer_Satisfaction_ Survey_National_Report_2014_to_2015_.pdf 4 What rating does the training provider have for their learners? • FE Choices learner satisfaction organisations provider file 2015 to 2016 https://www.gov.uk/government/publications/fe-choices-learner-satisfaction-survey-2015-to-2016 5 What is their Ofsted grade? • Check it is not older than 2 years, more recent grades are more relevant ecitb.org.uk

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Useful Links Useful links Apprenticeship changes – a general information page https://www.gov.uk/government/collections/apprenticeship-changes Occupations approved for the development of an apprenticeship standard (names of employers) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/522681/Occupations_ Approved_For_the_Development_of_an_Apprenticeship_Standard_6th_May.pdf List of Apprenticeship Standards approved for delivery (caps) https://www.gov.uk/government/publications/apprenticeship-standards-ready-for-delivery List of employers involved in Trailblazers https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517474/Employers_an d_other_Organisations_Involved_in_Trailblazers.pdf List of standards available https://www.gov.uk/government/collections/apprenticeship-standards Funding www.gov.uk/government/publications/apprenticeship-funding-from-may-2017 ecitb.org.uk

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Any Questions?

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