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Apprenticeship Funding Reforms

Last updated - 19 April 2017

Changes in the way that apprenticeships are funded and designed are taking place, including the introduction of an Apprenticeship Levy from April 2017. Read JTL’s guide below on what the apprenticeship reforms are, and how they might affect you. 

1. Why are things changing?

As part of its commitment to support an increase in the quality and quantity of apprenticeships, the government is introducing a programme of apprenticeship reforms. These include:

  • The implementation of an apprenticeship Levy from April 2017.

  • A change in the amount of financial support that Government will offer to certain apprenticeships.The establishment of a new Institute for Apprenticeships led by employers to support quality apprenticeships.

  • Employers at the heart of designing new apprenticeship Standards through the Trailblazer programme; Standards are to replace all existing frameworks by 2020.

  • Apprenticeships to be given equal legal protection to degrees.

  • The abolition of employer NICs for apprentices under the age of 25 from April 2016.

  • Apprenticeship targets for public sector bodies with a consultation on a new duty on the public sector to have 2.3% of its workforce comprising apprenticeships.

The purpose of these changes is to encourage greater employer involvement and demand for apprenticeships together with ownership of the content and assessment (Standards), funding (Levy, fees and negotiation) and oversight (Institute for Apprenticeships).  

2. What is an apprenticeship?

Government is very clear on its definition of an apprenticeship and this is important when it comes to understanding why the apprenticeship reforms have been introduced.

  • An apprenticeship is a job with an accompanying skills development programme including workplace learning, formal off the job training and end point assessment.

  • Apprentices will gain technical knowledge, practical experience and wider skills they need for their immediate and future careers through a range of learning and the ooprtunity to practise new skills in a real work environment.  

  • Apprentices must be an employee on the first day of their apprenticeship and be paid at least a wage consistent with the law for the time they are in work and in off the job training. 

  • The apprenticeship must last at least one year or more ifspecified in the apprenticeship Standard or Framework. 

It is a requirement of the Apprenticeships, Skills, Children and Learning Act 2009 that the employer must have an apprenticeship agreement with the apprentice.  This can be a contract of employment but it must include specific information setting out how the employer, the provider and the apprentice will support the successful achievement of the apprenticeship

3. When is this happening?

Most of the reforms have either taken place or are well underway.

The first apprenticeship starts on the new Standards began in September 2014, but new ones are still in development.

The Apprentice Levy was introduced on 6 April 2017 and new funding arrangements will commence on 1 May 2017.

4. Where is this happening?

The reforms will affect apprentices who live and work in England and are fundable through the Education and Skills Funding Agency which is part of the Department for Education. 

Please contact the local JTL representative for information on funding for apprentices in Wales and Scotland.

5. Who will be affected by the funding arrangements

The new funding arrangements will apply to all apprentices and employers from May 2017 although arrangements for employers liable for Llevy will be different to those employers whose paybill is less than £3m. 

Apprentices who start their apprenticeship on or before 30th April 2017 will be funded through to completion according to existing rules and funding levels. 

In a change to previous arrangements when individuals could only be funded to be trained to a higher qualification than that already held, from 1st May 2017, individuals will be funded to be trained to an apprenticeship at the same or at a lower level as long as they will acquire substantive new skills as a result.  

7. How will changes in funding arrangements affect my apprenticeship with JTL?

The qualifications offered by JTL have been allocated to the following bands:


Standards for plumbing, and heating and ventilating are due during 2017. 

Frameworks will be subject to an additional 20% uplift for 2017/18 only.

6. What are the changes in funding arrangements?

From 1 May 2017 15 new funding bands will be introduced covering all Frameworks and Standards (i.e. QCF and Trailblazers):


Each individual Framework pathway will be allocated to a single funding band away from the existing arrangement relating to apprentice age.

8. How much will employers have to contribute financially?

Prior to and including 2014/15, no financial contributions were required from employers with the exception of apprentices who were aged 19 and above who were not fully funded by government.

Following the Richards Review, 2015/16 saw the introduction of the “Trailblazer” standards requiring employer contributions of one-third. JTL moved the majority of its electrotechnical provision to this new model in 2016/17 at the £27,000 funding band which included significant financial incentives to employers at various stages of the apprenticeship.

Under the new arrangements to be introduced from May 2017, this £1: £2 contribution ratio will no longer apply.

Instead:

  • the co-investment rate for non-Levy paying employers will be 10% with 90% met by Government.

  • small employers (with fewer than 50 employees) taking on 16-18 year-old apprentices will not be required to invest*.

  • all employers (Levy and non-Levy paying) who take on a 16-18 year-old will receive an additional £1,000, as will the training provider.*

    *N.B. This will also apply in respect of 19-24 year-olds who were formerly in care or who have an Education, Health and Care Plan.
     

It is important to understand what category the employer falls into in order to ensure that the maximum funding support is accessed.
 

As a result, an example of the funding implications for an electrotechnical employer is as follows:

9. What happens next?

JTL will continue to support and assist employers before, during and after the transition period to the new funding arrangements.  There will be some changes to documentation and processes for some employers including contracts:


For further information, please contact your JTL Training Officer.

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