What you need to know...
Since the general election in 2015, apprenticeships have been a major government priority to improve skills and productivity in the UK. In order to support this the government are making significant changes to how apprenticeships are funded and what an apprentice will actually do.
You can read the quick guide to apprenticeships funding or see below for further reading.
HMRC guidance on Apprenticeship reforms is also available here.
To calculate your levy credit and model your levy spend visit: www.fas.report
What are the changes?
Historically Apprenticeships have been made up of frameworks, developed by sector skills councils to meet business needs. A framework covered a host of qualifications, skills and competencies which could then be applied to a variety of job roles within a specific sector/occupation. Apprentices have been internally assessed by their training provider on an ongoing basis throughout their apprenticeship and dependent upon the framework, there may have been some additional end testing involved.
Under the reform frameworks will be replaced by “standards”. This comprises of a two page document detailing the generic skills, competencies, behaviours and attitudes required by an individual to carry out a job role supported by a more detailed assessment plan as to how these will be achieved. The requirements of the standard may or may not be qualification-based but the standard itself and the achievement of the standard will be independently assessed at the end of the programme.
The standards are being written by employer groups, made up of large employers through to SMEs, in order to get a cohesive standard that meets sector needs.
A key part of the reform is putting employers in the driving seat in terms of funding. Previously funding has gone directly to the providers. Now, the government is putting control of the funding directly in the hands of employers. As a result of such a key policy change, the funding landscape for the next 2 years will be complicated. York College will support employers through this process by:
- providing information updates
- providing direct support to access funding
- supporting employers with any challenges that come from this transition period.
The reforms are generating an open competitive business market for the procurement of apprenticeship training provision by employers. Employers are clearly in the driving seat of who they choose to deliver their apprenticeship training with. There is scope to negotiate fees and content around the standard they choose as most appropriate for their individual staff member and business needs.
The reforms are opening up participation. Apprenticeship standards are being developed at higher levels of learning than previously. Standards are now available at levels 4, 5, 6 and 7 and will continue to be developed. This places apprenticeship study on a level playing field with university and degrees.
The Government is doubling the level of spending on Apprenticeships by 2019-20 in cash terms, as part of the reforms, and will be introducing the Apprenticeship Levy from April 2017.
The levy will be payable by all employers, regardless of sector, if they have a payroll bill in excess of £3million per annum. The Levy rate will be 0.5% of the employer pay bill and will be collected through Pay As You Earn (PAYE). The government will pay a 10% top-up for your apprenticeship training funds each month, meaning that for every £1 that enters your account for spending on apprenticeship training, you’ll get £1.10.
There will also be changes to funding for apprenticeship training for employers whose payroll bill is less than £3m a year – the majority of UK business. When the new funding system starts, you can you can continue to train apprentices and choose the appropriate standard or framework Approved Training Provider.
You will agree a price for the apprenticeship with the training provider and will be able to spread it over the lifetime of the apprenticeship. Employers will be asked to make a contribution to the cost of this training and the government will pay the rest, up to the maximum amount of government funding available for that apprenticeship. As both you and the government make a payment, we call this ‘co-investment’.
The government has confirmed it will pay 90% towards the cost of training and assessment, and employers will pay the remaining 10%.
Every individual apprenticeship framework and standard will be allocated to a funding band. The upper limit of the funding band will cap the maximum price that government will ‘co-invest’ towards. The new apprenticeship funding system will have 15 funding bands, with the upper limit of these bands ranging from £1,500 to £27,000. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands.
A new Digital Apprenticeship Service is being created which will allow employers to open online accounts so that they can directly access apprenticeship funding. This digital system will allow employers to:
• search for relevant standards/frameworks to match their job roles
• search for providers who deliver
• advertise their vacancy
• receive applications from people interested in the role
• claim the money to pay/support the delivery of the apprenticeship programme.
The diagram below illustrates how this will work:-
Read our guide to Apprenticeship Funding Reforms
Click on the links below for video presentations created by the Skills Funding Agency
For more information
To register your interest in finding out more, attending one of our information events, exploring how apprenticeships could benefit your organisation or to discuss your apprenticeship plans in more detail, please contact York College Business Development Team.
Telephone: 01904 770368