Your Apprenticeship Levy – What can it be used for?


Over the last few weeks, several employers have asked us to clarify what their Levy can be spent on.  This information is also of use to non-levy paying employers accessing apprenticeships so they can understand what the Government funding is available for.

Apprenticeship_Employers_BadgeFunds in the new digital account via the Digital Apprenticeship Service (DAS) will initially be for levy paying employers and these employers will start to see their funds appear in their account in May 2017, once the levy is collected from April 2017.    Eventually the digital account will be rolled out to all employers and the Government is aiming to do this by 2020.

The funds in Levy-paying employers’ digital accounts, and funding provided by the Government for non-levy paying employers, can only be used towards the cost of apprenticeship training and end point assessment through an externally contracted training provider, such as ITEC, or evidenced costs for direct employer-provider delivery, where the employer is registered with the Government to provide training to their own apprentices.

You can use your funding for:-

  • On-job and off-job training with an approved training provider including attendance for training courses, workshops, reviews of progress meetings, setting up the individual learning plan (ILP), processing the individual learning records (ILR), etc.
  • Registration, materials, examination and certification costs that are required modules or gateways within the Apprenticeship Standards
  • Planned on-programme assessment and the end point assessment, including costs associated with quality assurance of the assessment and certification
  • E-learning/distance learning as part of a blended learning programme. The whole apprenticeship cannot be delivered as e-learning but 10-20% is encouraged and, in some standards, required.
  • Resits for qualifications where further learning has taken place

You cannot use your funding for:-

  • Recruitment, enrolment, induction, assessment of prior learning, etc., or for setting up the Apprenticeship programme
  • Apprentices’ wages, accommodation and travel costs
  • Provision of Personal Protective Equipment (PPE) required by the apprentice in their every day work
  • Purchasing capital equipment
  • Training, assessment, examinations and certifications of any optional modules not required by the Apprenticeship Standard
  • Resits of examinations or the End Point Assessment where further learning does not take place
  • Time spent by employer staff and managers supporting, mentoring, coaching and developing the apprentice
  • Training delivered solely by distance learning/e-learning
  • Training, assessment and certification fees for the apprentice to acquire a license to practice
  • Repeating the same qualification that the apprentice has previously achieved or for any GCSE where the apprentice has achieved Grade C or higher

Other key points to be aware of:-

  • Apprentices must be employed full-time for a minimum of 30 hours a week and the employer must show they have a true vacancy available, i.e. not just to complete the apprenticeship
  • The apprenticeship can be a for a new employee or for an existing employee where the individual needs significant new knowledge and skills
  • The apprentice must complete the apprenticeship, including all training and assessment, within their usual working hours
  • The minimum duration of an apprenticeship is one year and a day plus the time for end point assessment (approx. 3-5 days)
  • Apprentices must not be asked to contribute financially to the cost of learning
  • There must be an Apprenticeship Agreement in place

As specialists in Technology and Business Training, how can ITEC help?   We have over 33 years’ experience of providing training programmes in IT Professional or Digital Administration careers for your staff.   Our IT Professional Apprenticeships include Microsoft and CompTIA certification and our Digital Business Administration Apprenticeships include specialisms such as Social Media, Using Microsoft Office or Sage Accounts.

zena haydon 2015

Zena Haydon of ATL Transport, ITEC’s Award Winning Apprentice of the Year 2015

Should you need any information or assistance with setting up an apprenticeship placement for a new job role or for one of your existing staff or just want to find out how an apprenticeship with ITEC can help with your workforce development, get in touch.   We can help!   If we can’t help, we know someone who can!  As members of the NOVA Partnership, we have several partners in the South Essex area covering a wide variety of sector skills and working to the same exacting quality standards as ITEC.

Get in touch today!  Toni Marshall, toni@iteclt.co.uk 01268 286929  www.iteclt.co.uk

Apprenticeship Funding from 1st May 2017


Apprenticeship Funding from 1st May 2017 including the new Apprenticeship Levy – Update November 2016

All Employers will be funded under the new funding regime for their apprentices commencing from 1st May 2017.   Any apprentices who commenced prior to this date will continue to be funded through the current system.    Apprentices cannot leave the current system and re-start on the new funding system after 1st May unless there are extenuating circumstances.

For Levy-paying Employers, i.e. those with a payroll over £3M, funds will appear in their DAS account from end of May onwards.   The first Levy tax will be payable to HMRC from April and Government will top up the funds by 10% each month.     Funds in the DAS will expire after 24 months unless spent on apprenticeships and this expiration will be on a first-in, first-out basis.

Apprenticeship_Employers_BadgeThere are 15 funding bands set by Government, depending on the occupational sector.   It doesn’t matter whether the apprentice is undertaking a Frameworks apprenticeship or a new Standard apprenticeship, the funding will be capped in one of these 15 bands.  The employer will negotiate a price for their apprentice, depending on the amount of training needed, e.g. a school leaver with no prior experience may be charged at maximum amount whereas a 28-year old with previous experience and knowledge may only need some of the training and will be negotiated at two-thirds of the cap.   This will be agreed between the employer and the training provider and a commitment statement and contract will be raised to cover the agreement.   Once this is in place and the apprentice commences, funds from the DAS can be paid to the Training Provider.

Non-levy paying employers will be partially funded for their apprentices.   They will need to pay 10% to the training provider and the training provider will be able to claim 90% of the funding from the Government.  This system will also commence in May 2017 but non-levy paying employers will not be required to use the DAS until 2018.  The Government plans to have all apprenticeships paid from the DAS by 2020, using the above system of negotiation and contracts per apprentice/employer.

In the meantime, apprentices with non-levy paying employers will be funded by the Government direct to the Training Provider and the Employer’s 10% cash contribution will also be paid to the Training Provider.  So for ITEC employers and apprentices, it will be business as usual.

Extra Support and Incentive payments

The Government has promised payments to help meet the additional costs associated with training young apprentices so all employers will receive an incentive payment when they employ a 16-18 year old apprentice, or a 19-24 year old with an Education and Healthcare Plan provided by local authority or has been in the care of the local authority.   There will be an incentive payment of £1000 available for the employer for training an apprentice in this category.  Training Providers will also get £1000 towards the cost of training these young employees.

Funding will be available for English and Maths training where the apprentice does not have the required minimum standard and needs to undertake an English and/or Maths course.  These payments will be made to the training provider.

The funding for Framework apprenticeships has been significantly reduced to encourage the growth of new Standards apprenticeships.    During the transition period, Government has agreed to increase the framework funding by 20% for 16-18 year old apprentices or 19-24 year olds with an Education and Healthcare Plan provided by local authority or has been in the care of the local authority.    There will also be some disadvantage uplift funding available to support apprentices from areas of deprivation.

How can we help?

ITEC has been running training programmes for young people and local employers since 1984 and has trained 1000’s of young people from the Basildon district.   Many of our past learners have gone on to achieve fantastic careers and some are employing and training today’s apCompTIA logoprentices!    Whether you are a levy-paying employer or a non-levy paying employer, we have apprenticeship programme options to suit your needs.     Specialising in ICT, Digital Administration (administrative roles with computer use) and Social Media, we can offer BCS, Microsoft and CompTIA professional qualifications as part of the programme.   We are here to help and can assist you with getting the best out of the new apprenticeship funding system to meet your business objectives.

For further details contact our:

Youth Programmes Co-ordinator, Toni Marshall, 01268 286929 Toni@iteclt.co.uk, or

Business Development Manager, Kirk Redhead, 01268 286929 Kirk@iteclt.co.uk

Training tomorrow’s workforce today is our speciality!

Apprentice Ryan’s Charity Challenge


Apprentice takes on charity bike ride

Ryan has just completed his Advanced Apprenticeship with ITEC and is an ICT technical professional working with a local employer.

Ryan has considered taking part in the London to Brighton bike ride a couple of times but has been put off by the crowds of people on the start and finish lines making it difficult to get going followed by the difficulty of getting back home from Brighton.    So in early summer 2016, when he and his brother were once again considering entering the run, they decided to create their own challenge.

Ryan says “We decided to increase the challenge and ride over 100 miles to Norwich, double the distance to Brighton.   We only had a few weeks to train as we hadn’t cycled much over the past 12 months and we missed a lot of training days because of bad weather, so we knew we had a difficult time ahead.   We were also doing the ride on mountain bikes which certainly added to the physical challenge on the day.”It was important to us that we supported a local cause and our chosen charity was South Essex Wildlife Hospital in Grays, who rescue and rehabilitate Britain’s wild animals.   We chose SEWH for the following reasons:

  • We care about animal welfare.
  • South Essex Wildlife Hospital is a Charity, NOT a business.
  • It is run by volunteers who care about the animals.
  • No injured or sick animal is turned away. This means they do not euthanize animals simply because they do not return profit.
  • South Essex Wildlife Hospital relies entirely on donations.

Our donation from our supporters, who include ITEC, will go towards:

  • Treating injured animals
  • Rehabilitating animals
  • Buying equipment, food and other essentials
sewh-cheque-ryan-sibley

Ryan present the donations to South Essex Wildlife Hospital

How did it feel?

Ryan says “Leading up to the ride we were mostly excited, although we were a little concerned as it got closer and closer because we knew we had not done much training.   In the two weeks leading up to the rider we were frantically buying bike accessories on eBay,, such as storage bottles and frame pannier bags, to use to carry essential tools, food, vacuum-packed clothes and battery packs.
We were checking on the weather stats for the weekend and they seemed to be getting progressively worse with suspected thunder showers!”

Their bikes were pre-packed and ready to go by the night before so on the morning of the ride they were up at the crack of dawn, had a wholesome breakfast and set off towards Norwich at about 6:30am, to make the best use of the daylight.   After 9 hours of cycling and a pit stop or two for food and water, plus a longer one for a puncture repair (as well as a couple of stops for admiring the scenery and taking a photo or two), they finally arrived at their hotel in Norwich some thirteen and a half hours later.

bikes

A photo opportunity of the lovely villages they passed through on their ride

Ryan continues “The first 30 miles really seemed to fly by but the journey was mostly uphill and we definitely started noticing it in our legs after the halfway mark.   We even had a thundershower following us for about an hour that did eventually catch us up to ensure we got a soaking!   The hills were getting progressively harder as we approached the last 40 miles and, at this point, it seemed the miles were ticking by very slowly but knowing people had donated to the cause kept us motivated.”

Ryan summarises “Overall, it was great fun and we did have a really interesting and challenging ride. We were mostly in the middle of nowhere going through fields and forest paths and we did see some lovely quaint villages that we wouldn’t normally get to see”.

So what next for our intrepid apprentice?

Ryan jokes “Next time we will have to up the ante and ride a lot further, maybe to Snowdon in Wales or from East to West coast!   I have set myself some interesting, and exhausting, physical challenges this year.   In September I took part in the Nuclear Blackout Obstacle course race, which is 5K laps of running, crawling, various obstacles, swimming, etc., within a 2-hour time limit in the dark, lit only by competitors’ head torches!  I lived to tell the tale!  In November I plan to take part in the Nuclear Fallout event, which will be a 12K race through similar terrain but in freezing temperatures, where hypothermia is a potential risk.  What am I thinking?!”

Ryan is an excellent role model for today’s new apprentices.  He’s busy holding down a full time job, while completing his apprenticeship and while taking on his personal challenges to raise money for charity.  Well done, Ryan, we are so proud of you!

Ryan Sibley

 

sewh-cheque-ryan-sibley

ITEC Award is won by Twins!


At this year’s annual awards evening in June 2016, the Social Media Apprentice of the Year award had joint winners for the first time in its history.    The winners, Kymbly and Tarnya Till, were not only are first joint winners of an award, they are also twin sisters!

Kerry, the ITEC staff member who nominated the sisters for the award, said “Despite being twins, their work was very different and of a high standard but I could always tell whose work was whose.   They both interpreted their case studies well and presented their work in exemplary fashion.  They were both deserving of the nomination and I am so pleased the panel were able to see what I could see“.

The judging panel, who reviewed the nominations, said “There was nothing between them so it would have been unfair to give one first place and the other a runner’s up trophy.  They both had worked equally hard and both deserved to win the Award.   We know it’s an unusual decision to have 2 winners but there really was parity between them.”

So Kymbly and Tarnya, you are both winners in our book.   As twins and sisters, you are the same yet different!  Well done to you both on this historical achievement!

tills-kerry

L-R Tarnya Till, Kerry of ITEC and Kymbly Till

 

Apprenticeship Levy – Part 3


Apprenticeship Levy Consultation – Update 15th August 2016

#Apprenticeships #Essex #ApprenticeshipLevy #FutureApprenticeships

Last Friday, the Government published their proposals for implementing the Apprenticeship Levy and the structure for funding Future Apprenticeships from May 2017.

They included a new set of incentives for employers to encourage them to get involved, updates to eligibility and the latest on funding available for non-levy employers.

What’s new since the last update

There will be 15 bands within the funding structure.   Each framework or standard will be assigned to a funding band for the employer to negotiate a price with their chosen training provider.  The upper limit within each band caps the amount of funding available for each apprenticeship.

The training provider MUST be on the Register of Apprenticeship Training Providers (RoATP)

There will now be a 20% completion incentive payment for all employers.  This means that when an apprentice completes his/her learning and takes the end point assessment, regardless of whether they achieve, a completion payment of 20% of the funding will be paid.

Subjects within the STEM (Science, Technology, Engineering and Mathematics) priority areas will get an uplift of 40% for level 2 and 80% for level 3 to encourage take up of these areas.

Employers and training providers will receive an additional £1000 each to support a 16-18 year old apprentice, a care leaver or those that have a Local Authority EHC (Education and Health Care) plan.

The levy will be collected from 1st April 2017 for all employers with a payroll bill in excess of £3M.  The first £15K of the levy will not be collected.

Non-levy employers will be required to pay 10% of the funding and will received 90% Government funding for their apprentices.  Small employers of less than 50 employees, who employ a 16-18 year old apprentice, will receive 100% of Government funding.

Levy payers who have exhausted the funds available in their levy account will also be able to claim 90% Government funding for taking on further apprentices.

Apprentices will be eligible to be on a programme lower than the level of their highest qualification if there is significant new learning including graduates.

The new funding structure will be for all apprentice starts after 1st May 2017, regardless of whether the apprentice is following the old framework or the new standards.  The new standards will be funding far more favourably than the old frameworks.    Apprentice starts prior to 1st May will remain on the old funding structure

Employers who set up as a Training Provider to deliver their own apprenticeships will be subject to Ofsted inspection.

Robert Halfon, the newly appointed Apprenticeships and Skills Minister said today: “We need to make sure people of all ages and backgrounds have a chance to get on in life. Apprenticeships give young people – especially those from disadvantaged backgrounds – a ladder of ‎opportunity. That’s why we continue to work tirelessly to deliver the skills our country needs. The apprenticeship levy is absolutely crucial to this.

“Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.”

The consultation is open to 5th September.  Follow this link for full details.

https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

 

 

ITEC Awards 2016


It’s that time of year again!  The ITEC Awards 2016 were held at Bowers & Pitsea Football Club on Thursday 16th June 2016.  #Essex #Apprenticeships

The 2016 winners were announced and the results are:-

Social Media Apprentice of the Year

Outstanding achievement by a Social Media apprentice.  Presented by Councillor David Harrison, Mayor of Basildon Borough

Finalists: Leone Murungah, Alexandra Snell, Kymbly Till, Tarnya Till

Social Media runner up 3

Leone Murungah with Mayor David Harrison

Joint Winners – KYMBLY TILL AND TARNYA TILL

Runner-up – LEONE MURUNGAH

This is the first time the panel has been unable to separate 2 finalists and chose to issue the award to 2 winners.

 

 

CompTIA learner of the Year

A special award recognising the effort and achievement of learners undertaking CompTIA exams as part of their coursework.  Sponsored by CompTIA UK.

Finalists: Billy Allen, Michael Deeley, Douglas Martin, Liam Parkins, Shannon Wayland

Winner – SHANNON WAYLAND

CompTIA runner up 2

Michael Deeley with CompTIA’s Jane Dickinson

Runner-up – MICHAEL DEELEY

 

 

 

 

 

Employer of the Year

Awarded for outstanding development and support of learners at work.  Sponsored by Engleman Wills & Powers of Attorney

Finalists: Gable Hall School, Gilbarco Veeder-Root, Microdec PLC, Packaging Aids, Southend Borough Council, Vertical Systems Limited

Employer of the Year winner

Vertical Systems with Martin Engleman

Winner – VERTICAL SYSTEMS LIMITED

Runner-up – GILBARCO VEEDER-ROOT

Vertical Systems are celebrating 35 years in business during 2016.

 

 

 

IT Apprentice of the Year

Awarded for outstanding achievement by an apprentice undertaking an IT Diploma apprenticeship.  Sponsored by Vertical Systems Limited.

Finalists: Michael Deeley, Brighan Morris, Liam Parkins, Jack Pearce, Shannon Wayland

Winner – MICHAEL DEELEY

Runner-up – BRIGHAN MORRIS

Line Manager of the Year

Awarded for outstanding development and support of learners at work.  Sponsored by the empoyer of our 2015 winner, Gilbarco Veeder-Root

Finalists: Richard Bowles (Gable Hall School), Sally Hasted (Ipeco Holding PLC), Andrew Jackson (Alan Blunden & Co.), Patrick McDonald (NHS NELCSU), James Rawlinson (Chelmsford City Council), Paul Watson (Prism Partnership)

Winner – RICHARD BOWLES  (Gable Hall School)

Line Manager of the Year winner

Richard Bowles

Runner-up – PATRICK McDONALD (NHS NELCSU)

 

 

 

 

ITEC Staff Member of the Year

A special award recognising the effort and support of a member of the ITEC team.

Winner – KIRK GIBSON

Staff Member of the Year 3

Kirk Gibson with ITEC CEO Wendy Vickers

Business Admin Apprentice of the Year

Awarded for outstanding achievement by a level 2 apprentice undertaking a Business Administration or Customer Service apprenticeship.  Sponsored by ATL Haulage Contractors Limited, our 2015 Employer of the Year.

Finalists: Cameron Christall, George Donovan, Kirsty Ilett, Demi Rainford, Shannon Reed, Kirsty Walker

Admin winner 3

Kirsty Walker

Winner – KIRSTY WALKER

Runner-up – SHANNON REED

 

 

 

 

 

Adult Learner of the Year

Awarded for outstanding achievement and effort for over 19 year olds undertaking a part-time course with ITEC (non-apprenticeship courses).  Sponsored by H W Wilson Limited.

Finalists: Siobhan Collyer, Peter French, Philip Salmons, Emma Semple, Benna Smith

Winner – EMMA SEMPLE

Adult learner winner 2

Emma Semple

Runner-up – SIOBHAN COLLYER

 

 

 

 

 

ITEC Academy Learner of the Year

Outstanding achievement by an ITEC Academy learner.  Presented by NHS North and East London Commissioning Support Unit. 

Finalists: Harry Cozens, Andrew Webb

Academy learner winner

Harry Cozens

Winner – HARRY COZENS

Runner-up – ANDREW WEBB

 

 

 

 

The ‘Malcolm Bridges’ Award

This award is to recognise the achievement and effort of a learner who has overcome barriers to achieve the outcomes on his/her course

Finalists: Billy Allen, Kirsty Ilett, Ben Stookes, Shannon Wayland

Winner – SHANNON WAYLAND

Malcolm Bridges Winner

Shannon Wayland with Malcolm Bridges

Runner-up – BILLY ALLEN

Well done to all the finalists!  Congratulations to the winners and runners-up!!

A big thank you to all our sponsors, employers and learners.

 

Wendy Vickers

ITEC CEO

 

 

Apprenticeship Levy Part 2


Part 1 of this blog was published on 6th May 2016

Co-investment from Government

Co-investment has been promised for non-levy paying employers and for those employers whose levy account does not cover the full cost of the apprenticeship.

Non-levy paying employers will be partially funded for their apprentices.   At the moment, they will need to pay 33% to the training provider and the training provider will be able to claim 67% of the funding from the Government.  This percentage was correct at going to press but Government say more information will be available from June 2016 and this is likely to change.    Official quote is “non-levy payers and those who have spent their levy budget will be required to make a small contribution as a co-investment”.   This system will commence in April 2017 but non-levy paying employers will not be required to use the DAS until 2018.  The Government plans to have all apprenticeships paid from the DAS by 2020.

Levy-paying employers will need to ‘top up’ payments if their levy payment does not meet the cost of the apprenticeship.  The Government has promised support and co-investment to help but no details yet on how much.   Each apprenticeship standard has a funding band limit set by the Government.

Funding limits

Extra Support and Incentive payments

The Government has promised payments for help meet the additional costs associated with training young apprentices so all employers will receive an incentive payment when they employ a 16-18 year old apprentice, or a 19-24 year old with an Education and Healthcare Plan provided by local authority or has been in the care of the local authority.   These payments are for the employer and will be paid to the employer.

Funding will be available for English and Maths training where the apprentice does not have the required minimum standard and needs to undertake an English and/or Maths course.  These payments will be made to the training provider.

Further information is due from the SFA/BIS during June so watch out for Part 3!

Apprenticeship Levy


The Apprentice Levy – What does it mean for employers?

The Apprenticeship Levy is coming in April 2017.   Every employer in England will be eligible to pay the Levy but only those employers with a salary bill of more than £3 million will have their levy collected by HMRC.     The levy has been set at 0.5% of the salary bill, which will be collected on a monthly basis.   The first £15,000 is an allowance and will not be collected.

From April 2017, there will be Levy-paying employers and Non-levy paying employers.

Levy example

Remember as well that class 1 NICs have been abolished for apprentices under the age of 25 from April 2016.

Digital Apprenticeship Service

Employers will be able to spend their levy funds to pay for the training and assessment of their apprentices and will access these via a new online portal called the Digital Apprenticeship Service (DAS).   Funds will be available to spend from May 2017 (after the first levy collection in April 2017).   The Government will top-up the funds by 10% each month, so for every £1 paid in, £1.10 can be spent.   Funds in the DAS will expire after 18 months unless spent on apprenticeships and this expiration will be on a first-in, first-out basis.

To spend their levy funds, employers must choose a training provider, such as ITEC, and agree a price for their apprentice/s.  The payments for the apprenticeship will be spread over the life time of the apprenticeship to an agreed schedule.  Once the apprentice has started, monthly payments will be taken from the DAS and paid to the training provider.

Coming next blog….. Funding limits and Government co-investment

GCSE Grading Changes – What do they mean to Employers?


The grading system for GCSE’s is changing and these changes will affect all 16 year olds leaving school from the summer of 2017.   Which means, in turn, these changes will affect our apprenticeship employers.  #Apprenticeships #Essex

This follows changes that have already been made, the most significant of which is that coursework is no longer allowed as part of the grading system, so from now on nearly all subjects will be assessed by examination.

BBEERJ GCSE 5 years copyright to 0421

Employers are familiar with the current grading system of A*, A, B, C, etc., through to G.   The new grading system will be 9 through to 1, with 9 being the top score and 1 being the bottom score!  Not only have we gone from 8 scores to 9 scores but we have also changed the ascending scale to descending, making it extremely difficult to make a direct connection between the old and the new scale.

So, employers will be asking, quite rightly, “what is the new equivalent of the C grade?”   A good question but to which no one has a definitive answer as yet.   We think it is likely that a grade 5 will be considered a ‘pass’ rather like the C grade is now but we are guessing.  However, it should mean the ‘pass’ grade for GCSE’s just got a little harder as the bar has been raised.

Apprenticeships give school leavers, whether they leave at the end of year 11 or stay on for a couple of years, a real alternative to college or university as they can earn while they learn in the work place, gaining that valuable work experience for their CV that so many college and university graduates lack.    It’s not for everyone, of course, but nowadays it is a real choice for those wanting a professional career, especially in IT servicing, a specialism that ITEC has over 30 years’ experience in!

From 2017, students’ GCSEs will be marked numerically from nine down to one. But how will these grades correspond to the current A*-G system?

See link for full article in the Guardian:

http://www.theguardian.com/teacher-network/teacher-blog/2014/apr/03/gcse-grading-system-shakeup-teachers

 

The Future of Apprenticeships and the Apprenticeship Levy


The future of Apprenticeships in Englandapprentice #Apprenticeships #Basildon #ITEC

 From ‘Frameworks’ to ‘Standards’ and the changes in funding arrangements

Trailblazer Apprenticeship ‘Standards’ are replacing the current  apprenticeship ‘frameworks’ and the way in which they are funded is changing from 2017.   All employers will be expected to financially contribute towards the apprenticeships as the Government transfers the purchasing power to the ‘users’ rather than the ‘providers’.    It was originally planned that the Government will invest £2 for every £1 paid by the employer up to a ‘cap’ and these caps were dependent upon the sector of the Standard.  Thus, the new funding system would be ⅓ employer funded and ⅔ Government funded.

However, with the announcement of the Apprenticeship Levy in the Autumn 2015 budget, further changes are coming into play and will affect the way apprenticeships are funded.  The Apprenticeship Levy comes into force in April 2017 and will be a massive game-changer. #Levy #Apprenticeshiplevy

How will the new Apprenticeship Levy work?

The Levy will be mandatory and based on payroll costs.  Those employers with a total payroll bill of over £3M will have to pay 0.5% of the total cost into the levy pot.  The first £15K is an ‘allowance’ so for employers with a bill of exactly £3M, then the levy is £15K and not collected.   An employer with a salary bill of £4M, the levy will be £20K of which £5K will be collected.

This means, in effect, that employers subject to the levy may be paying up to 100% of their apprenticeship costs, whether or not they have any apprentices and this will undoubtedly affect internal staff training.

Apprenticeship_Employers_BadgeThe good news is that Apprenticeships will now be available to all age groups so employers will not be restricted to recruiting and training school or college leavers, although they will still make up the majority benefiting from this training.

Therefore, the funds can be used for workforce development, to up-skill current staff of all ages and can assist with staff promotion programmes, i.e. those being given more responsibility or moving into a more senior role.    However, there must be significant new knowledge and skills required to be eligible to draw down apprenticeship funding.

There are also constraints, of course.  The funding must be used for training for an Apprenticeship Standard and the funding must pay for off-job training with an approved training provider.   It cannot be used for general staff training, special projects or CPD updates unless this is within the apprenticeship programme delivery.   The levy system does not recognise the training employers do for their own staff so, to ensure they get a return on their levy, they will need to outsource their training.   The off-job training must be a minimum of 20% of the required apprenticeship training and must be delivered as part of ‘time off for study’ regulations.   The funding will not cover on-job training.  However, there are three employer incentive payments;   1. for businesses with less than 50 employees, 2. for training 16-18 year old apprentices and 3. for completing the apprenticeship.

What will it mean for levy payers, payers of a small levy, non-levy payers and SME’s?

josh wild mabThe plans for SME’s remain the same, i.e. ⅓ employer funded and ⅔ Government funded.   However, watch this space, as changes may be announced in the coming months.   It is expected that eventually SME funding will also come from the levy pot, making Apprenticeships sustainable for the future but meaning that large employers will also be providing the funding for apprenticeships for SME’s.

At the moment, employers are expected to top up their contributions if not covered by the levy.  So for example, where the levy that has been paid is £4K but the apprenticeship costs £6K, the employer is expected to meet the £2K additional cost.   However, there are plans to allow employers to draw down more than they put in by re-allocating ‘unused’ funds – again, watch this space, while the Government decide on these parameters.    The Government is also looking at ways very large employers can ring fence their levy funds for apprenticeships within their supply chain but there is nothing definite announced as yet and this will be difficult to manage.

Institute for Apprenticeships

A new organisation will be set up to be responsible for the governance of apprenticeships; The Institute for Apprenticeships.  This body will be overseeing the development and implementation of standards and quality.  There is no real news about how Osfted fits into this remit as of yet.

The levy pot will be managed by the Digital Apprenticeship Service and funding will be allocated by use of a ‘virtual account’.   The funding must be ‘spent’ within 2 years of being allocated.

What does it mean for our employers and apprentices?

So the new funding structure means there will no longer be a fixed rate per apprentice.  Each apprenticeship programme will be agreed between the employer and the training provider and will be based on what training and development the apprentice needs to meet the assessment criteria of the Standard.

MCSA-LogoThis price will need to include any off-job training elements, assessments, reviews and the end of programme synoptic assessment costs (rumour has it that the cost for end assessments is going to be a % of funding).

There will also be a need for a payment schedule to be agreed between the employer and the training provider to maximise cashflow opportunities across both parties.   Funding for SME’s is drawn down when a matching cash sum has been paid to the training provider by the employer so it is very important to have a mutually agreed payment schedule as part of a commitment statement.

Our apprenticeship offer to employers needs to be flexible, varied and meet the needs of the parties involved.  We can do this by varying the courses on offer and offering workforce skills development programmes.  This could be a ‘pick and mix’ variety of learning and services based upon the learners’ development needs, the needs of the employers and the requirements of the job roles, and could include:

  • Technical courses
  • Qualification coursesTime management
  • Life/soft skills courses
  • Knowledge courses
  • Preparation sessions to prepare for Gateway to assessment
  • The synoptic assessment (external costs)
  • ILPs and reviews of progress
  • Recruitment costs

Wendy Vickers

Chief Executive                                

4th March 2016