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Apprenticeship Reform Update: October 2016

 

Following the consultation document published in August, to which there were 892 responses the Department for Education have published (25th October) how apprenticeship funding will work from May 2017 onwards.

 

The Register of Apprenticeship Training Providers:

 

From May 2017, levy paying employers will be able to choose a provider from a new register – the Register of Apprenticeship Training Providers. The new register will open for applications on 25th October 2016 – with the first selection of assured providers drawn from those who complete applications by 25th November 2016.

 

At the same time SFA will also launch a procurement for apprenticeship delivery for smaller employers who do not pay the levy. This will run in parallel to the register being open.

 

Organisations who want to deliver less than £100k of apprenticeship training per year as a subcontractor will not need to apply to the register – however, these providers can choose to apply if they want the flexibility to provide larger volumes of training or to give assurance to those they wish to contract with that they have met the requirements of the register.

 

There will be three routes to entry.

 

Main Route – Providers eligible for selection by levied employers to deliver apprenticeship training, or for selection by another main provider to work as a subcontractor.

 

• Supporting Route – Providers who do not have the capacity and capability to deliver a full apprenticeship, or who wish to operate solely as a subcontractor. Providers on the supporting route will be able to deliver up to £500,000 of apprenticeship training per year, before being required to apply to the main route.

 

Employers – a tailored application route will be introduced for employers interested in becoming a registered provider.

 

Applicants to the register will need to pass a range of tests in the areas of financial health, due diligence, quality, capacity and capability, differentiated according to the application route.

 

All applicants will need to pass quality and financial tests, so that employers can have the confidence to do business with them. During the first year, SFA will continue to accept parent company guarantees for applications to give providers time to adapt to the new requirements.

 

Providers will be ineligible to apply to the register if they have a grade 4 “inadequate” rating for their apprenticeship provision.

 

Apprenticeship Funding:

 

The section below highlights how policy has developed / changed in response to the consultation feedback.

 

16-18 Frameworks: In addition to the price that the employer and provider agree for training 16-18 year olds on a framework, the provider will also receive a payment from government equivalent to 20% of the funding band maximum for that framework. This 20% uplift is a transitional measure to support provider stability. These payments will come directly from government and will not be deducted from an employer’s digital account.

 

This will be in addition to the £1,000 incentive for both employers and providers to recruit 16-18 year olds.

 

Disadvantage: For framework delivery only a simplified version of the current system will provide at least the same level of funding to support those from disadvantaged areas. This will be an interim measure for one year whilst a full review is undertaken.

 

Providers will receive an additional £600 for training on a framework an apprentice who lives in the top 10% of deprived areas, £300 for any apprentice who lives in the next 10% (the 10-20% range) and £200 for those in the next 7%. (the 20-27% range).

 

Expiry of digital account funds: funds in digital accounts including top ups will expire after 24 months unless they are spent on apprenticeship training.

 

If you would like to discuss the impact of the apprenticeship reforms on your organisation, please contact us on 07740429624 or paulblott@eunoiaassociates.com

 

Apprenticeship Reform Update: 12th August 2016

 

Following a lengthy delay the Department for Education published the latest update on apprenticeship funding - it is in the form of a proposal which is open for feedback until 5th September, with final funding arrangements to be published in October.

 

Ok - so what's happening: Employers in any sector, with a pay bill over £3m will pay the levy through PAYE. The new system will begin 1 May 2017 - all starts before this date will be funded through existing rules. The government will top up levy payments by 10%. These levy payments can be used to fully fund apprenticeship training.

 

There will be 15 Funding Bands: With upper limits ranging from £1,500 to £27,000, with this limit acting as a cap for levy payers, and the maximum government will co-invest towards apprenticeship costs for non levy paying employers or those who have exceed the funds in their digital accounts.

 

All existing frameworks and new standards will be placed within one of these funding bands. There is no minimum level, and it is up to the employer to negotiate a price with a provider. Employers can negotiate the best price for the training they require from a training provider.

 

 

STEM Frameworks: The proposal is to increase the current government funded adult rate for Level 2 by 40% and Level 3 and above by 80% and then allocate the framework to the nearest funding band.

 

Apprenticeship Standards will receive higher funding to reflect the government view that they are of higher quality and greater rigour - but also clearly to incentivise their delivery.

 

Apprenticeship frameworks will be funded at the same rate regardless of age and geographical location: Meaning the current price differential between 16-18 year old and adults is removed.

 

Co-investment Rate: Proposed that employers co-invest 10% of the costs, with the government funding the remaining 90%. (Compared to trailblazers 1/3 to 2/3 co-investment model).

 

Small Employers (less than 50 employees): Small employers who recruit 16-18 year old apprentices will not be required to co-invest with government funding 100% of the training costs. Both employers and providers will each receive a further £1,000 payment when young people are recruited (16-18) to cover the additional costs of supporting younger learners. Payments will be made at 3 months and 12 months.

 

English and Maths: The government proposes to pay providers £471 for the delivery of Level 2 english and maths qualifications. This will be funded by government and will not be deducted from an employer's digital account.

 

Retraining: It is proposed that employers should be able to use funds from levy payments and co-investment to allow employees to undertake apprenticeships at the same or lower level which allow them to acquire substantive new skills.

 

Transferring Levy Funds: From 2018 levy paying employers will be able to transfer up to 10% of their digital accounts to other employers - such as companies within their supply chain.

 

 

Proposals for a Register of Apprenticeship Training Providers:

 

Also published on Friday 12th August, were proposals for a new apprenticeship provider register. (RoATP) which providers must apply to if they want to deliver apprenticeships post April 2017.

 

The proposal is that any organisation who wishes to deliver apprenticeships must apply to RoATP regardless of size. Ensuring that the whole provider market is visible to employers when they select and chose provision.

 

This will mean all providers, including current subcontractors will need to make an application to RoATP.

 

The government proposes that where a provider subcontracts provision to another provider for the delivery of a number of full apprenticeships - that this is removed and in future the employer has the relationship directly with the subcontractor as a lead provider.

 

The role for subcontracting moving forward is proposed to resolve issues for employers when they wish to purchase specialist provision which may need to be delivered by more than one provider.

 

The government proposes three potential routes to RoATP:

 

Main route: Delivery of full apprenticeships, and parts of frameworks under a subcontracting arrangement.

Support route: Entry for market for those who support providers delivery and will have no direct relationships with employers.

Employer-provider route: Where levy paying employers wish to deliver apprenticeship training to their own employees.

 

Applicant tests: the RoATP will have a strong focus on the applicants capability to deliver high quality apprenticeships, supported by the applicants fitness and ability to receive public funding.

 

There will be three tests, which will feature a number of questions:

 

a. Due diligence.

b. Financial health.

c. Quality, capacity and capability.

 

It is proposed that the register will open in October 2016 - and will when in steady state open every three months to allow new entrants to the market. The consultation on RoATP ends September 5th.

 

If you would like to discuss the impact of the apprenticeship reforms on your organisation, please contact us on 07740429624 or paulblott@eunoiaassociates.com

 

 

Apprenticeship Levy Update: 3 August 2016

 

As we continue to wait patiently for further info relating to apprenticeship reforms - particularly how they impact upon non levy payers. It is important for providers to make sure that they are reform ready. We are experts in analysing your readiness and helping you to undertake activity necessary to maximise the opportunities available.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apprenticeship Levy Update: 3 April 2016

 

On 21st April the Department for Business Innovation and Skills published further guidance on how the levy will work - answering many of the outstanding questions.

 

Further guidance will become available in June, with full funding and eligibility rules published in October and finalised December 2016.

 

June 2016: Will see further detail on.

  • Provisional funding bands
  • Provisional level of government support - for non levy funded apprentices.
  • Additional payments for 16-18 apprentices.
  • Information on who can deliver apprenticeships and how employers can apply to become approved providers.

 

Who pays the levy and how: Employers in any sector, with a pay bill of over £3 million will pay the levy.

 

It is confirmed that the levy will be collected by HM Revenue and Customs, through Pay as you Earn (PAYE) alongside tax and NICs.

 

Employers who pay into an existing industry levy scheme will still be required to pay the apprenticeship levy.

Employers who pay the levy will be entitled to access funding for apprenticeships through their Digital Apprenticeship Service account, which will be used to source training providers, and fund training and assessment of apprentices. Employers will be able to register their accounts from January 2017, and able to use the account from April 2017. Funds will appear in accounts from late May 2017.

 

Government will top up levy accounts by 10% each month, to increase the amount available for employers to spend on apprenticeship training in England.

 

Funds paid into the levy will expire after 18 months, unless they are used on apprenticeship training. When employers spend funds, the oldest levy payments will be automatically accessed. Employers accounts will auto notify when funds are due to expire, so that employers can choose to spend or not.

 

In the first year, employers will only be able to spend levy on their own employees, it is under consideration that in future years levy may be transferable to other organisations, such as supply chains.

 

Apprenticeship Training Agencies if their pay bill is above £3m will contribute to the levy, and will be able to use funds in their own account to pay for training costs. ATAs who do not pay the levy will be able to access support for training and assessment on the same basis as employers who do not make levy contributions.

 

All apprentices who begin their programmes before April 2017 will be funded for their full duration under original funding terms and conditions. Employers will not be able to use levy to fund any payments to providers for these existing learners.

 

Employers who don't pay the levy - will be asked to make a contribution to the cost of training and government will fund the rest upto a maximum level (co-investment). This co-investment will be paid directly to the provider by the employer, over an agreed schedule. More details on the rate of government support will be available in June and confirmed October 2016.

 

Employers who pay the levy will also be able to co-invest where their levy payments do not meet the total costs of training required). There will be a rate set each year, stating the proportion of the money employers will be expected to pay. There will be extra support for all employers taking on 16-18 year olds or apprentices requiring extra support.

 

Employers will choose the provider they wish to work with (from an approved list) and the training they require, this can be an apprenticeship standard or framework - frameworks will be phased out by 2020, as we move to standards based apprenticeships.

 

Employers using their digital account to fund training will see funds coming in monthly through the levy, and payments to providers leaving to cover the costs of training, and forwarded to the relevant provider.

 

Employers will negotiate and agree a price with their selected training provider, were apprentices have english and maths support needs, these will be funded by government to the chosen provider.

 

Employers can only spend the levy or access support for apprenticeship training and assessment - this must be delivered by an approved training provider. The Skills Funding Agency will ensure that providers meet a set criteria before joining the list of providers eligible to deliver apprenticeships.

 

Employers are encouraged to become approved providers, and can access the funds in their own digital accounts, as a route to the delivery of high quality apprenticeships.

 

If you would like to discuss the impact of the levy on your organisation, please contact us on 07740429624 or paulblott@eunoiaassociates.com

 

 

Apprenticeship Levy Update: February 2016

 

In the 2015 Autumn Statement, the Chancellor George Osborne confirmed an apprenticeship levy on employers would be introduced to help fund the aspiration of 3 million apprenticeship starts by the summer of 2020.

 

The levy will be introduced in April 2017.

 

A number of questions remain unanswered, particularly in relation to how apprenticeships will be funded for small to medium sized businesses, and further information will be published in late spring 2016.

 

Are you ready for the levy: This page is designed to help apprenticeship training providers and employers to understand the impact of the levy upon their businesses, to provoke thought, discussion and aid general levy readiness.

 

If you would like to discuss the impact of the levy on your organisation, please contact us on 07740429624 or paulblott@eunoiaassociates.com

 

Greater control in hands of employers: The levy, allowance and voucher system will place more control in the hands of employers. They will have complete choice over which provider they work with and will be able to negotiate both price and level of service. It is expected that this choice will improve both competitiveness and the quality of training.

 

Digital Apprenticeship Service: The service will allow all employers (large and small), regardless of whether they have contributed to the levy to select the most appropriate standard for them, choose training providers, find candidates and pay for apprenticeship training and assessment through a simple online portal.

 

Who pays the levy: The levy will be introduced at a rate of 0.5% of an employers pay bill (Total PAYE).

 

All employers will receive an allowance of £15k per annum to offset against payment of the levy. This means that payment will only apply to businesses with a pay bill in excess of £3m. (2% of employers, approximately 22,000 in total).

 

Payment of the levy is mandatory, businesses cannot opt out. Public sector employers are not exempt, which presents a significant market opportunity for the provider base.

 

The NHS is set to be the largest contributor to the levy, and the public sector will contribute 97,000 starts per annum to the national target.

 

All employers, large and small will receive the £15,000 per year allowance to help fund apprenticeship training.

 

How will levy contributions be made: It is likely that HMRC will collect the levy monthly through PAYE, beginning April 2017. Employers will have an online account which they can access to spend their levy contributions, through a voucher system.

 

What can the levy fund: The levy can only be used to fund apprenticeships, and cannot be used to pay wages or any other form of CPD. We are progressing to new standards in all vocational areas and providers and employers should check out the list of approved and in development trailblazer standards. Approved Standards.

 

There are approximately 80 new standards available for delivery, with many more in development. Apprenticeship frameworks are still fundable, but will be phased out for new starts commencing 2017.

 

Approved providers: The levy and any government funding can only be "spent" with providers approved on the Skills Funding Agency (SFA) register and will be subject to OfSTED inspection.

 

This is a significant change, as this register is much more extensive than the range of providers the SFA currently directly funds - and may lead to a significant reduction in the volume of sub contracted provision, impacting negatively upon lead providers. Check out clause 2.22 of the governments latest apprenticeship plan, as it may lead to one of the greatest shake ups in provider mix over the last couple of decades. More...

 

Large employers subject to the levy could decide to contract directly with the SFA, and draw down training funds, although the employer would be subject to SFA audit and OfSTED quality assurance and inspection regimes.

 

What if the training costs are more than my levy contribution: The government is committed to allowing employers access to levy funds unused by other employers.

 

How long do I have to access my levy contribution: This is yet to be confirmed, but it is likely to be two years. After which, the funds will be removed from the employers electronic account.

 

Who can access my levy funding - Supply Chain: Government are considering the possibility for large employers to allow their supply chains to access their contributions. More on this expected in the spring announcement.

 

Institute for Apprenticeships: Alongside the levy, the Institute for Apprenticeships will be established as an independent employer led body to oversee apprenticeship quality and the achievement of the 3 million starts target.

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