Apprenticeship Funding Proposals in England

1. Regional Network UpdateAugust 2016 Commissioned and funded by ETF. Delivered by AELP and partners.

2. Policy and Government changes • FE, HE and Skills responsibility moves to Department for Education (DfE) • New Secretary of State (SoS) for Education - Justine Greening • New Minister for Apprenticeships – Robert Halfon

3. New ministerial local growth champions Nick Hurd – Leeds City Region, Humber, York and North Yorkshire, Sheffield City Region, Derbyshire and Nottingham, Greater Lincolnshire, Leicester and Leicestershire, London Baroness Neville-Rolfe – Cumbria, Lancashire, Swindon and Wiltshire, Dorset, Buckinghamshire Thames Valley, Thames Valley Berkshire, Northamptonshire, South East Midlands, Hertfordshire Jo Johnson – Greater Cambridge and Greater Peterborough, New Anglia, South East, Coast to Capital (area from South London to the coast of Brighton), Greater Manchester, Solent, Enterprise M3 (M3 Corridor), Cheshire and Warrington

4. New ministerial local growth champions (appointed by BEIS) Margot James– Greater Birmingham and Solihull, Black Country, Coventry and Warwickshire, Stoke-one-Trent and Staffordshire, Worcestershire, Gloucestershire, Liverpool City Region Jesse Norman– Tees Valley, North Eastern, The Marches, Oxfordshire, West of England, Heart of the South West, Cornwall and the Isles of Scilly

6. Proposals for apprenticeship funding in England from May 2017 • New guidance issued on Friday 12th August 2016 • Sets out the Governments proposals for apprenticeship funding in England from May 2017 • Consultation period open until Monday 5th September • Link to complete consultation survey: https://beisgovuk.citizenspace.com/ve/apprenticeship-funding-proposals

7. Apprenticeship Levy Update (Levy Payers) • Employers in all sectors with a pay-bill over £3 million will need to pay the apprenticeship levy of 0.5% • Employers will declare levy payable based on payroll year to date. The first time eligible employers will have to declare their liability to HMRC will be in May 2017 for levy due on their April payroll • Levy-paying employers will be able to purchase training through the new digital system from the start of May 2017 • The new system will pay providers one month in arrears for training they report has been delivered

8. Apprenticeship Levy Update (Levy Payers) • Employers will also receive a 10% top up to monthly funds • 20% of the total cost of training will be held back and taken from DAS at the end of the apprenticeship • Employers that want to offer apprenticeships over and above their levy allowance, it is proposed will be co-funded by Government at a 9:1 ratio (90% Government payment, 10% employer contribution) • Any unused allowance will be carried from one month to the next. • Funds will expire 18 months after they enter the employers DASaccount and be removed

9. Employer recruits apprentice Employer selects provider from DAS Initial negotiations on pricing take place between provider and employer Provider and employer agree and sign written agreement/SLA Employer flags on DAS to prompt payment schedule and SFA issues auxiliary agreement Overview of Levy Process (Levy Payers) End point assessment (EPA) when apprentice reaches gateway Provider pays EPA organisation from levy funds EPA issues certificates Provider pays employer incentives Provider establishes learner evidence pack Provider sets up ILR registration including cash contribution (from non-levy employers

10. Non-Levy Payers • Co-investment rate is 9:1 (90% Government funding, 10% employer contribution) • Employers will be able to search for providers using DAS but will not need to use the system to pay for training and assessment until at least 2018 • Employers will pay their 10% directly to the provider initially until this is set up through DAS • Providers will have to prove to SFA that the payment has been received in order to trigger the Government funding

11. Example Model – Non-Levy Payers Apprenticeship band max price £9,000 Employer negotiates price of £8,500 with their provider Employer co-invests remaining 10% = £850 Government co-invests 90% = £7650 Employer and provider agree how the costs is spread i.e. £850 over 10 month = £85 per month

12. Provisional Funding Bands Provisional funding bands • Why? Setting limits on the amount of government or digital funds that can be used for a single apprenticeship supports quality training whilst ensuring apprenticeships are affordable for individual employers and deliver value for taxpayers. • Every apprenticeship will be placed in a funding band • All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands. This will depend on the level and type of apprenticeship. • 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. • The upper limit of the funding band will also cap the maximum price that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds and is eligible for extra support. • Employers can negotiate the best price for the training they require • Employers will be able to negotiate prices with providers. • 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.

13. Key points from updated funding guidance (released 12th August 2016) • Start date for new system – 1st May 2017 • 15 new funding bands ranging from £1,500 to £27,000 • Frameworks will be banded in the same way as standards from April 2017 • Co-investment ratio = 9:1 • Waived co-investment for small employers (<50 employees) training 16 – 18 year olds • Waived co-investment for small employers where the apprentice is 19-24 year old care leaver or has a Local Authority Education Health and Care Plan (EHCP)

14. Key points from updated funding guidance (released 12th August 2016) • £2000 extra support for apprentices aged 16-18, 19-24 care leavers or have an EHCP - £1000 to employers and £1000 to training providers • £150 a month learning support for apprentices who require additional learning support • Employers will be able to use funds to re-train individuals to allow them to acquire skills (*subject to prior qualifications) • Employers will be able to transfer up to 10% of the annual value of funds to other employers on the digital system** • STEM framework pathways to receive increased adult funding rates – 40% at L2 and 80% at L3 • Maths and English to be funded at £471 per qualification, paid directly to the training provider (not out of the employer’s levy account)

15. Further information - links to funding guidance documents • Apprenticeship levy: how it will work • Apprenticeships: government spending and expected levy payments • Apprenticeships: proposals for funding from May 2017

16. RoTO AEB, Traineeships, Learning Loans, ESIF RoATP Apprenticeships (Providers & Employers) Provider Registers DAS Levy payers + find an apprentice + find a provider RoAAO End Point Assessment Organisations

17. Register of Apprenticeship Training Providers (RoATP) • This is a significant change! • New register for apprenticeship delivery providers. Cannot deliver or be funded if not on this register. Separate from ROTO! • Training providers must apply to join the RoATP if wanting to deliver apprenticeships to any employer from May 2017 • Providers who have received a grade 4 by Ofsted for Apprenticeship Provision will not be eligible to apply • Managing agents, intermediary bodies, consortium leads, brokerage organisations or any other similar entity that does not itself deliver education and training to apprentices will not be eligible to apply to the RoATP

18. Register of Apprenticeship Training Providers (RoATP) • SFA considering the possibility of three application routes: • Main provider • Specialist provider • Employer/Provider • Three areas will be tested: • Financial Health • Due Diligence • Quality, Capacity and Capability

19. The role of Sub-Contracting • The expectation is that the main provider will deliver significantly more than half of each apprentice’s training and at all times will maintain the relationship with the employer • A provider would be able to supplement its own delivery by bringing in expertise from supporting providers to deliver parts of the apprenticeship

20. Register of Apprenticeship Training Providers (RoATP) Register will re-open every 3 months

21. Register of Apprenticeship Training Providers (RoATP) Please click on the following link for further information and guidance Register of apprenticeship training providers You can take part in the consultation by clicking https://www.surveymonkey.co.uk/r/L8L67YP The deadline for the consultation is Monday 5th September 2016

22. Further Guidance - Timeframes Proposals for apprenticeship funding information and RoATP issued on 12th August Open for consultation until 5th September August 2016 Final levels of funding Draft funding and eligibility rules October 2016 Final detailed funding and eligibility guidance December 2016

23. Withdrawal of apprenticeship frameworks The following links contain information of all frameworks that have been removed to date, and any further consultations Removal of apprenticeship frameworks https://www.gov.uk/government/collections/apprenticeship-changes

24. Future Apprenticeship Support Programme Phase 1 Future Apprenticeships Portal Links to information on the apprenticeship reforms, details about CPD opportunities and a range of resources http://futureapprenticeships.org.uk/ Future Apprenticeships Toolkit Tools to equip providers to the transition process from frameworks to standards http://www.excellencegateway.org.uk/content/etf2326)

25. Future Apprenticeship Support Programme Phase 2 https://www.youtube.com/watch?v=p6l__JPhzls&feature=youtu.be

26. Strands 1 - 3

27. Strands 4 & 5

28. Future Apprenticeship Support Programme Phase 2 More information (including dates and booking details) is available on the Future Apprenticeships website http://futureapprenticeships.org.uk/

29. Sainsbury Review and Post 16 Skills Plan Choice of academic or technical education route at 16 The technical option fully implemented by 2022 will consist of 15 routes covering “college‐based and employment based (apprenticeship) education”. Institute for Apprenticeships remit widened to become the “only body responsible for technical education” and it will be called the Institute for Apprenticeships and Technical Education by September 2018. AELP Briefing paper No. 40 published in July providing a summary of the key essential points that providers should be aware of, along with commentary on the AELP position http://www.aelp.org.uk/news/submissions/details/aelp-briefing-paper-no40-summary-of-report-of-the/?utm_source=eshot&utm_medium=email&utm_campaign=AELPBriefingPaper40-SummaryofReportoftheIndependentPanelonTechnicalEducation

30. More useful links….. • Register of apprentice assessment organisations • Future of apprenticeships in England: guidance for trailblazers • Apprenticeship standards: changes to the process for approvals • Regulation of new apprenticeship end-point assessments (Ofqual) • Post-16 skills plan and independent report on technical education

31. Further updates • Please note that due to the frequency and speed of change at this present time, information in this PowerPoint was correct at time of writing • Further updates will be disseminated in October, December and March