Apprenticeships – many changes, many opportunities

Someone once said to me “The only constant in Further Education is change!” and that saying seems truer now than ever! After months and years of proposals and consultations, it sometimes didn’t seem as much like the moving of goalposts but often a relocation to an entirely different stadium! However, we are now in position to DRIVE forward with the apprenticeship reform. This is the point where we draw a line in the sand.

For those working in the FE sector and in positions similar to me a lot of the changes will be easier to understand, and their colleges will be taking action to address them. However, in education we have the tendency to talk a lot of jargon, to use (A LOT OF) abbreviations and to refer to terms (like frameworks and standards) that mean something else in a different setting. So I thought I’d take this opportunity to let my LinkedIn contacts and partner organisations know what it all means to them.

The Apprenticeship Levy – and changes to funding

First things first – this comes in to action from May 1st 2017 (with first payments taken from companies in April 2017).

This is the big one, the one that has been talked about in the press a lot. In simple terms this is how the Government are going to walk away from their current ￡1.5billion commitment to apprenticeship funding and replace it with up to ￡3billion, all coming from less than 2% that are the country’s largest businesses.

Before we work out how that affects your company you need to know that the value of each apprenticeship has become clearer. Previously it was a ‘dark art’ working out apprenticeship funding but now each have a set price - referred to from now on in as a funding cap.

At this point we need to work out which category of company you will be:

1.      Companies with a P.A.Y.E bill of over ￡3million

You will contribute 0.5% of any additional P.A.Y.E payments to a Levy – creating your own Levy Pot (For example a company with a P.A.Y.E bill of ￡4million will have a levy pot of ￡5000. ￡4 million = ￡1million over the threshold 0.5% of ￡1million is ￡5000)

If you’re one of the 2% of companies paying the Levy, you can use your Levy pot to pay for new apprenticeship provision. Payments will be allocated on a monthly basis via a Digital Voucher system (more detail on that in a future post or contact me directly).

A positive point is that any additional apprenticeship provision that uses more than what is available in your Levy pot will be charged at 1:9 ratio with you paying 10% and the Government topping up the additional 90%

Companies that don’t pay the levy will see the funding for apprenticeships change too – these changes will be DEPENDENT ON THE SIZE OF THE COMPANY.

2.      Companies over 50 employees (and with a P.A.Y.E bill UNDER ￡3million)

You will pay 10% of the negotiated funding cap for the TRAINING of your apprentice. The remaining 90% will be picked up by the Government

3.      Companies under 50 employees (and with a P.A.Y.E bill UNDER ￡3million)

Take on/train an apprentice aged between 16-18 and not only will you pay ZERO you will also receive a ￡1000 incentive from the Government.

Take on/train an apprentice aged 19 or over and you will pay 10% of the negotiated funding cap with the Government picking up the remainder.

So in summary, those 2% of companies that will pay the Levy (remember, a P.A.Y.E. bill over ￡3million) will fund apprenticeships going forward. The number 50 is the magic number for all other companies. Over 50 employees and you will pay 10% (of the negotiated cap) of all apprenticeship training. Fewer than 50 and you will pay ZERO for a 16 – 18 year old apprentice and 10% for an apprentice aged 19 or over.

That audacious 3 million Apprenticeship starts

Apprenticeships have been a focal point of this Government and at the start of the reforms the then Prime Minister, David Cameron announced that a target of three million apprentices would be achieved by the end of Parliament. This audacious claim seemed unachievable under the previous boundaries but new guidelines and fresh approaches are in place to help achieve it.

• Here’s something new - the Public Sector has been set an additional target (as well as the requirement to pay the Levy) to have 2.3% of its workforce as apprentices. Yes – this means the NHS, Police forces, Fire Services, Schools, Local Authorities etc.
• Apprenticeships are being rapidly created from Level 2 – Level 7. That means as high as Degree level apprenticeships.
• Apprenticeships are for existing as well as new staff. This has always been the case, but it’s much more reinforced now.
• You can move down a level to train as an apprentice as long as substantial new learning takes place (For example, someone with a degree in History could retrain as an apprentice in Accounting).

So now the picture is becoming clearer the appeal of taking an apprentice or upskilling existing staff as apprentices is greater.

If you are still reading now, thanks! You should understand how your organisation is categorised (Levy, Non-Levy over 50, Non-levy under 50) and you are probably thinking about how your organisation can benefit, asking yourself things like “Could I really take my potential managers all the way through to Degree level in management and only pay a maximum of 10%?” or “I could retrain [insert name] to support the digital/accounting/sales/ marketing (delete as appropriate) side of our business?”

I’d like to say that is all of the changes but unfortunately it is not. In amongst all these funding changes we are seeing a fundamental change in how the qualifications are created, delivered and assessed from employer led groups. But that is for a future post. If you’d like myself or one of the business team from Hartlepool College to come out and see you please don’t hesitate to get in touch.