Apprenticeship ReformsFunding update

Bryony Kingsland

UK Funding Manager

November 2016

AGENDA

• Quick update and overview

• Register of Apprenticeship Training Providers (RoATP)

• Sub-contracting

• Digital Apprenticeship Service (DAS)

• Procurement process to deliver

to non-levy paying employers

• Funding arrangements

QUICK UPDATE

ON THE REFORMS

• The government is committed to significantly increase the quantity and quality

of apprenticeships in England to reach 3 million starts in 2020, they have put

employers at the heart of that requirement.

• To enable this, government are introducing an employer apprenticeship levy in April 2017.

• The levy applies to any employer with a pay-bill over £3million – 0.5% of pay-bill.

• At the same time, the Dept for Education and Skills Funding Agency have reformed the

funding and learning delivery arrangements - to meet the needs of the apprenticeship

changes.

• Any provider that wishes to continue to deliver apprenticeship from May 2017

will need to meet the new requirements.

SO WHAT’S NEW?

Dual system, dual processes:

Levy

Paying

Employers

Levy paid

Price agreed

Monthly deductions

paid to provider

Co-investment top up – if insufficient

funds

Non-Levy

Paying

Employers

Employer’s own funds

Agreed priceand payment

schedule

Invoicedby provider

Co-investment with government

WHAT ARE THE NEW

REQUIREMENTS?

• To access funding to deliver apprenticeships from May 2017, nearly all providers

will have to be on the new Register of Apprenticeship Training Providers (RoATP).

• Providers will also need to submit their details and apprenticeship offer to the new

Digital Apprenticeship Service (DAS), via the provider portal.

• If a provider wishes to deliver apprenticeships to non-levy paying employers, they will

need to respond to the Skills Funding Agency procurement that is currently taking

place on Contracts Finder.

• Providers may need to develop new internal processes to meet the new

funding arrangements.

REGISTER OF APPRENTICESHIP

TRAINING PROVIDERS

The first application process for entering the new register opened on 25 October 2016

and will close on 25 November 2016 at 5pm.

There are three routes for application:

Main route

Eligible for selection by levied

employers, or selection by

another main provider to

work as a subcontractor.

Supporting route

Entry route to the

apprenticeship market

for organisations that

offer a specialism, and

providers who only want to

deliver as a subcontractor.

Employer-provider route

Employers who want to

provide training to their

own staff. They will have

the flexibility to lead their

own programme, or act

as a subcontractor to their

appointed main provider.

RoATP

RoATP AND

SUB-CONTRACTING

There has been a relaxation of the proposals made in August for sub-contracting

apprenticeship delivery:

• Smaller providers may now act as sub-contractors with a main provider. They are not

required to be on RoATP – as long as they do not hold cumulative contracts above a

threshold of £100k.

• Main providers may sub-contract full delivery to smaller and supporting/specialist

providers, but there are rules on thresholds that apply here.

• Supporting/specialist providers, who have successfully applied to the register, cannot

receive more than £500,000 annually of apprenticeship funding for their sub-contracted

delivery.

SUB-CONTRACTING

Specialist/supporting

providers on RoATP, up to

threshold of £500k per year.

Small provider with

cumulative contracts of

less than £100k per year

Apprentice’s employer

or a connected company

(as defined by HMRC),

who are on the RoATP

Main

provider can

sub-contract to

the following:

SUB-CONTRACTING –

SOME OF THE RULES

• Funding for each apprenticeship will be routed through a single provider.

• Main providers can sub-contract to complement their own delivery

if employer requests this.

• The main provider must have a written agreement with the employer

that agrees the sub-contract arrangements, including:

• the amount of funding retained for direct delivery,

• management fees,

• how much each sub-contractor will receive.

• There are extensive due diligence and monitoring requirements to be met,

for any provider considering sub-contracting.

DIGITAL APPRENTICESHIP

SERVICE (DAS)

• A key aspect of DAS, will be the online search facility for employers, showing approved

apprenticeship providers.

• Providers who are successful in applying to the Register of Apprenticeship Training

Providers (RoATP), will be able to upload information about their offer, to the Digital

Service search tool.

• The portal will open for submissions of providers apprenticeship offer between

5 December and 13 January

• If you are a main provider and will offer apprenticeships through sub-contractors,

you may want to include the curriculum offer from sub-contractors on the DAS also.

But…

DAS – FIND APPRENTICESHIP

TRAINING TOOL

Provider trading name.

Overview of provider – introduction giving info about your

organisation – free text box on DAS – what will you include?

Apprenticeship Framework or Standard type of level.

Contact information, website details.

Delivery locations and modes available.

A brief description of how you deliver the apprenticeship.

Performance data for providers from – FE Choices, ILR

Achievement data, OfStEd – this information is populated

automatically.

https://www.gov.uk/government/publications/find-

apprenticeship-training-how-to-submit-data

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DELIVERY TO NON-LEVY

PAYING EMPLOYERS

• SFA is running a procurement exercise for the delivery of apprenticeship training

to employers who will not have a digital account.

• The Invitation to Tender (ITT) for the procurement opened on Contracts

Finder on Tuesday, 25 October and will close at 5pm on Friday, 25 November.

• To submit a bid to the ITT your organisation must have applied to join the RoATP

beforehand. If this is not done, your tender response bid will be invalidated.

Contracts Finder link

https://www.gov.uk/contracts-finder

DELIVERY TO NON-LEVY PAYING

EMPLOYERS CONTINUED

• The SFA are tendering a minimum value of £440m in this round for the period May 2017-

July 2018.

• This is split into £213m for 16-18 year olds and £227m for 19+.

• There will be a £100k minimum and £5million maximum on awards in this round, this figure

is for STARTS ONLY.

• The SFA will extend existing contracts to cover carry in – providers are not required to bid

for carry over funding.

• The Invitation To Tender (ITT) indicates that further awards during the term of the contract

are possible, e.g. for growth – so the £5m figure is not intended to be a cap.

• The results of the tender and RoATP applications will not be known until March 2017 -

delivery starts in May!

Fundingarrangements

FUNDING –

BEYOND APRIL 2017

Employers with a pay-bill

under £3million

(non-levy paying)

Continue to co-invest on 1:9 ratio

with government for the delivery

of Trailblazer standards and begin

to co-invest for the delivery of

ALL apprenticeships

Employers with a pay-bill

over £3million

(levy paying)

Pay an apprenticeships levy via PAYE

and HMRC – funds go into the DAS account.

With 10% additional top-up from government.

The DAS can only be spent on training

and assessment of apprenticeships.

APPRENTICESHIP

FUNDING OVERVIEW

• Levy paying employers will pay 100% of the costs of an apprenticeship to providers, out of

their digital account.

• Non-levy paying employers will contribute 10% of the cost of an apprenticeship and the

government will contribute 90% of the cost, in a co-investment arrangement.

• Levy paying employers who have exhausted their levy funds, but who wish to take on more

apprentices, will co invest with the government at the same 1:9 ratio.

• Employers with less that 50 (49 or less), employees will pay no contribution if they take on

a 16-18yr old apprentice, or 19-24 year olds who were formerly in care or who have

an Education and Health Care plan. These are fully funded by the government.

• From 2018, employers will be able to transfer 10% of their levy funding to another employer

with a digital account, e.g. an organisation in their supply chain.

APPRENTICESHIP FUNDING

OVERVIEW CONTINUED

• Government will contribute £2000 towards the costs of 16-18 apprenticeships –

£1000 for the employer, £1000 for the provider.

• But for Frameworks only, there is additional transitional funding to support for providers

with 16-18 yr old apprenticeship delivery.

• Further funding support and incentives for care leavers, and those with Education

and Healthcare plans.

• Payment for English and maths – £471 per qualification, not taken from employers

levy – paid for by government direct to provider.

• All existing apprenticeship frameworks and standards have been put into one of 15

funding bands from 1st May 2017

• There will no longer be any age restrictions to apprenticeship delivery after May 2017.

2017 FUNDING BANDS AND

CURRENT FUNDING CAPS

New Funding Bands from May 2017

for Standards and Frameworks

Current Funding Caps

for Standards

Band Band Upper Limit

1 £1,500

2 £2,000

3 £2,500

4 £3,000

5 £3,500

6 £4,000

7 £5,000

8 £6,000

9 £9,000

10 £12,000

11 £15,000

12 £18,000

13 £21,000

14 £24,000

15 £27,000

Funding

Band

Core Government

contribution cap (£)

Employer

contribution (£)

6 18,000 9,000

5 13,000 6,500

4 8,000 4,000

3 6,000 3,000

2 3,000 1,500

1 2,000 1,000

ADDITIONAL FUNDING

SUPPORT FOR FRAMEWORKS

Providers will receive payments towards the additional cost associated with training

16-18 year old apprentices and those requiring extra support. The amount will be 20%

of the full cost of a framework for apprentices:

• aged between 16 and 18 years old (or 15 years of age if the apprentice’s 16th birthday

is between the last Friday of June and 31 August).

• aged between 19 and 24 years old with either an Education, Health and Care plan

provided by the local authority, or those that have been in the care of the local authority.

• undertaking an apprenticeship Framework and recorded on the ILR as having

a postcode listed within the 27% most deprived areas of the country.

16-18 AND EHCP

FRAMEWORK INCENTIVES

Framework

name

Level Framework

pathway name

Funding

band

16-18

Employer

incentive

16-18

Provider

Incentive

Provider

uplift for

16-18 and

ECHP at

20%, for

framework

only

Total 16-18

and ECHP

provider

incentive

(inc £1000)

Maximum

possible

total

provider

funding

Business and

Administration3

Business and

Administration£2,500 £1,000 £1000 £500 £1,500 £4,000

Vehicle Maintenance

and Repair2

Light

Vehicle£5,000 £1,000 £1000 £1,000 £2,000 £7,000

Construction

Specialist3

Wall and

Floor Tiling£9,000 £1,000 £1000 £1,800 £2,800 £11,800

Electro-technical3

Electrical

Maintenance£12,000 £1,000 £1000 £2,400 £3,400 £15,400

DISADVANTAGE FUNDING

SUPPORT FOR FRAMEWORKS

As an interim measure, until SFA/DfE have reviewed, providers will receive

additional payments to support students from deprived area (as per the Index

of Multiple Deprivation).

£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% of deprived areas

(the 10-20% range).

£200 for those living

in the next 7% of

deprived areas

(the 20-27% range).

£600Top 10%

£30010-20%

£20020-27%

SOME FUNDING

EXAMPLES

16-18 Framework apprentice from top 10

deprived areas, plus uplift

Apprenticeship

Framework = £3000

16-18 Framework

uplift at 20% = £600

Disadvantage uplift

– top 10% = £600

16-18 incentive at £1000

£5200

+

+

+

Apprenticeship Standard 16-18 – small employer –

disadvantaged area

Apprenticeship

Standard = £3000

16-18 apprenticeship

uplift = £1000

No disadvantage uplift for

apprenticeship standard = £0

£4000

+

+

Example Framework plus Disadvantage

support

Apprenticeship

Framework = £5000

Disadvantage uplift

10-20% IMD = £300

£5300

+

=

=

=

MATHS AND

ENGLISH

• Funding is for apprentices who have not previously attained a GCSE grade A*- C

and will support;

• GCSE English Language or maths

• Functional Skills English or maths

• In exceptional circumstances SFA will fund approved stepping stone qualifications

to support progression to GCSE or Functional Skills.

• Maths and English are funded at £471 per qualification – not out of levy. Direct to provider

from government, claimed via ILR.

• Maths and English quals above a level 2, if required for an apprenticeship,

must be funded out of the levy or by the employer.

WHAT CAN

BE FUNDED

Funds from an employer digital account or government co-funded investment

can only be used for delivery directly related to the apprenticeship, e.g.

• On and off the job training.

• On programme assessment or formal end point assessment.

• E-learning as part of blended learning.

• Registration, materials, examination and certification related to the apprenticeship.

• Re-sit of qualifications or non-accredited elements – as long as additional learning

takes place.

• Accommodation for residential learning or taking part in skills competitions.

WHAT CANNOT

BE FUNDED

• Enrolment, induction, prior assessment, initial diagnostic testing or similar.

• Accommodation if apprentice is away due to requirement of the job.

• Travel costs for apprentices under an circumstances.

• Capital purchases.

• Apprentices’ wages.

• Educational trips, trips to professional events no specified in the standard.

• Re-sits where no additional learning is required or undertaken.

• Training/assessment, exams, tests or certification for licence to practice.

• Time spent by employees or managers mentoring the apprentice

(unless an employer/provider).

END POINT ASSESSMENT

COSTS AND RULES

• End point assessment costs are included in the funding band for each apprenticeship.

• Providers must ensure prices negotiated with an employer include the amount needed

for end assessment and EQA.

• End assessment payment arrangements will follow one of the following options:

• Either levy paying employer EPA costs come out of the levy payment to the provider

from DAS

• Or as part of the written agreement and payment contract between a provider

and non-levy paying employer.

SFA AND LEVY PAYMENTS

TO PROVIDERS

• Levy payment from DAS, and government co-investment payments, will hold back 20%

of funding to pay for end assessment.

• Providers must ensure they have sufficient information showing in their financial systems

to visibly evidence employer co-investment (payment, not just invoices).

• Apprentices must be on programme for a minimum of 42 days before they qualify for

funding from DAS or co-investment.

• VAT is chargeable to employers on co-investment funding – but take advice from HMRC!

TIMELINE

FOR ACTIONS

November

2016

December

2016

January

2017

February

2017

March

2017

April

2017

May

2017

By 5pm on

25 November

•

Applications

to RoATP

•

Respond to ITT

for supply

of provision to

non-levy paying

employers

HMRC publish

guidance for

levy paying

employers

•

Input course

data into provider

portal Course

Directory – Find

Apprenticeships

search facility

Employers

can register

on the Digital

Apprenticeship

Service

Non-levy ITT

outcome

published

•

First successful

applications

to RoATP

published

Second round

of applications

to RoATP?

•

Employers start

paying the levy

First

apprenticeship

delivery

under new

arrangements

to non-levy and

levy paying

employers

LINKS TO RELEVANT

DOCUMENTS

Provider apprenticeship funding rules 2017/18

https://www.gov.uk/government/publications/apprenticeship-funding-and-performance-

management-rules-2017-to-2018

Apprenticeship funding policy and dunding bands sheets

https://www.gov.uk/government/publications/apprenticeship-funding-from-may-2017

Register of Apprenticeship Training Providers

https://www.gov.uk/government/collections/register-of-apprenticeship-training-providers

Contracts finder – non-levy procurement portal

https://www.gov.uk/contracts-finder

Apprenticeship funding from May 2017 – policy paper

https://www.gov.uk/government/publications/apprenticeship-funding-from-may-2017

CITY & GUILDS

SUPPORT

City & Guilds will be offering the following:

• Webinar on RoATP – 9 November, 11am-12pm

• Employer Support Webinars – November and December

• Advance Support CPD Workshops –

January through to March 2017

• Support for successful RoATP application

• Support for apprenticeship set up

(new providers and employer providers)

• Regularly updated guidance on our

dedicated apprenticeship web pages

• http://www.cityandguilds.com/

what-we-offer/centres/email-updates

FURTHER SUPPORT

FROM CITY & GUILDS

We can also offer:

• Advice and guidance on the RoATP.

• Reviewing your RoATP application and

recommendations for improvement.

• Test the rigour of your organisation's

processes and systems against best

practice due diligence requirements.

• Identify gaps in current processes and

systems, including management

information and reporting.For further details please contact

nicole.butler@cityandguilds.com

Early in 2017, we will be running

workshops covering:

• Funding arrangements in detail.

• Planning for delivery.

• ILR changes.

• Performance management arrangements.

Q&A

We will now respond to your questions.

Thank youfor participating