Apprenticeships in action what does the levy mean for you?

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1 Apprenticeships in action what does the levy mean for you? 20/09/2016 Stefan Cecchini Head of Projects NCfN.

2 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 John Hayes Matt Hancock took over Sept 2012 Nick Boles took over July 2014 Robert Halfon Took over July 2016 Four consultations so far July Oct 2013 Mar May 2014 Aug Oct 2015 Aug Sept 2013

3 Four Big key changes: All frameworks to be replaced by standards Key changes: Standards are being designed by employer groups, require an endpointassessment 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).

4 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)

5 Frameworks v Standards

6 New delivery model? Inputs Negotiation On-programme End Assessment Outputs 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 onprogramme provider) Occupationally competent person with relevant professional/ trade body membership Opportunity for progression

7 What is the Apprenticeship Levy? With other reforms, will fund apprenticeships from April Applies to all UK private & public sector organisations. Monthly Paybill > 250k ( 1,250 allowance) 10% top-up from government, applied monthly

8 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.

9 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

10 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 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

11 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 apprenticeship delivery. Government fully fund 100%. ALL employers will receive a 1,000 incentive when they take on a apprentice There will also be an additional 1,000 paid to the training provider to support a apprentice

12 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.