APPRENTICESHIP REFORMS FACTSHEET
MAY/JUNE 2016
Make sure you’re up to speed on the apprenticeship reforms affecting businesses across the UK.
‘TRAILBLAZER STANDARDS’The Government has committed to growing apprenticeships with a target of 3million by 2020. The apprenticeship reforms are currently being trialled through new employer-led apprenticeship standards.
Public bodies are also required for 2.3% of the workforce to be comprised of apprentices.
WHY? RATIONALE FOR THE REFORMS
THE GUIDING PRINCIPLES OF THE REFORM ARE:• Employer-led apprenticeship standards that
meet their needs• Simplify current funding system• Secure more effective training by changing
funding to employers• Provides freedom and flexibility for
employers
EMPLOYER BENEFITS:• Apprenticeship content will be exactly what you
need• Ensure you are getting value on your
investment when working with your training provider
• Access to higher and degree level apprenticeships
• Ensure that at the end of the apprenticeship your apprentice is competent in the role you need them to do
EMPLOYER DRIVENEmployers designing
apprenticeships to make them more responsive to their needs and the future economy, and
controlling funding
SIMPLICITYSimplifying apprenticeship standards so that they are
shorter and more accessible
QUALITYImproving the quality of
apprenticeships so that they are viewed with the same
esteem as University
APPRENTICESHIP REFORM FACTSHEET
TRAILBLAZER FUNDING MODELA new, independent body is being established by Government which will regulate the quality of apprenticeships, advise on setting funding caps, whilst approving apprenticeship standards and assessment plans. The body will be fully operational by April 2017.
*correct as of May 2016
FRAMEWORKS V STANDARDSCURRENT APPRENTICESHIPS NEW APPRENTICESHIP STANDARDS
• Qualification-based framework, informed by employer feedback
• Extensive requirements
• Jargon-heavy structure
• English & maths qualifications
• ERR and PLTS requirements
• Portfolio and qualification-dependent assessment methods
• Continuous on-programme assessment
• Knowledge and competence elements separately assessed
• Apprenticeship completion on achievement of qualifications
• Not always linked to professional registration requirements
• Outcome-based, employer-defined standard and assessment
• Small number of government criteria
• Plain English standard
• English and maths qualifications
• No ERR or PLTS requirements
• Employer-specified on-programme assessment approach
• End-point assessment
• Synoptic, or combined, assessment
• Graded apprenticeship achieved if fully competent at end of training – with some solely pass/fail exceptions for some industries
• Must meet professional/trade body registration requirements
Maximum core government contribution (£2 for every £1 from employer)
CAP 1 CAP 2 CAP 3 CAP 4 CAP 5 CAP 6
£2,000 £3,000 £6,000 £8,000 £13,000 £18,000
Employer contribution if the cap maximum is required £1,000 £1,500 £3,000 £4,000 £6,500 £9,000
Co-payment for training and assesment if the cap maximum is required
£3,000 £4,500 £9,000 £12,000 £19,500 £27,000
Additional incentive payments
Recruiting a 16-18 year old £600 £900 £1,800 £2,400 £3,900 £5,400
For a small business (<50) £500 £500 £900 £1,200 £1,950 £2,700
For successful completion £500 £500 £900 £1,200 £1,950 £2,700
Maximum total government contribution £3,600 £4,900 £9,600 £12,800 £20,800 £28,800
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APPRENTICESHIP LEVYDuring the Summer Budget in March 2015, Chancellor George Osborne announced the introduction of an Apprenticeship Levy – as part of the Government’s drive to create 3 million apprenticeships in England by 2020.
If you have an annual pay bill less than £3 million you will continue to have access to Government funding – all employers will have access to the new Digital Apprenticeship Service regardless of whether they are contributing to the Levy or not.
WHAT WILL THE FUNDING CAPS BE?Yet to be announced, these will limit the amount of funds an employer can spend on the training of an individual apprentice, and will vary dependant on the level and type of apprenticeship. The higher levels and more expensive training is likely to be capped higher – the funding caps for 2017/18 will be announced later in 2016.
WHAT YOU NEED TO KNOW• Set to be introduced in April 2017• Paid via Pay As You Earn (PAYE)• Levy charged at 0.5% of employers pay bill• Each employer receives a £15,000 allowance
– meaning levy will only be paid on annual pay bills in excess of £3 million.
• Employers in England will be able to reclaim their contributions and choose training providers via a voucher system, through the new Digital Apprenticeship Service.
• The Government will apply a 10% top-up to monthly funds – so every £1 will be increased to £1.10 in value
• After a certain amount of time – yet to be decided – unused levy funds will be reallocated to other employers
• Employers who operate multiple payrolls will only be able to claim one allowance for the levy
INDIVIDUAL VOUCHER
ACCOUNTSEMPLOYERS
PROVIDERS
APPRENTICESHIP FUNDING
APPRENTICESHIP DESIGN
HMRC COLLECT LEVY
LARGER EMPLOYERS
Digital Payment
Funding claim and proof of training
Pay
men
t m
ade
to p
rovi
der
s
Money flow
Infomation flow
HOW THE LEVY WILL WORK
Employer of 250 employees, each with a gross salary of £20,000
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 - £15,000 = £10,000
Employer of 100 employees, each with a gross salary of £20,000
Paybill: 100 x £20,000 = £2,000,000
Levy sum: 0.5% x £2,000,000 = £10,000
Allowance: £10,000 - £15,000 = £0 annual levy payment
EXAMPLE ONE
EXAMPLE TWO
I WON’T PAY THE LEVY - HOW WILL THIS AFFECT MY BUSINESS?