There are a number of changes that are about to take effect or have taken effect this year, as outlined below.
- Frameworks to Standards
- Apprenticeship funding & apprenticeship levy
- Levels of apprenticeships
- Registered Training Providers
- Institute for Apprenticeships
This blog seeks to outline the changes & untangle the mystery of apprenticeships for you & your business.
Currently apprenticeships are based on apprenticeship frameworks. The frameworks are made up of 4 key elements: knowledge, competence, key skills & employment rights & responsibilities.
Knowledge –this may be a technical certificate/BTec studied 1 day a week at college or on block release
Competence –that assesses your skills, often through the form of a NVQ
Key skills & Personal Learning & Thinking. The key skills consist of Maths ,English & IT. These develop transferable skills no matter what the sector.
Employment Rights & Responsibilities – This is just 1 module & ensures that the apprentice understands their basic rights & responsibilities.
Frameworks are often long, complicated documents so the government has initiated a change from apprentice frameworks to standards with the purpose of standards being 2-3 pages long & easier to understand. The standards show what an apprentice will be doing and the skills required of them, by job role. Standards have been developed by employers groups known as “trailblazers” as opposed to colleges. The apprentice must spend 20% of their time in “off the job” training. Each apprenticeship standard will have an end assessment plan which will incorporate behavioural elements as well as skills.
As standards are approved, the frameworks will be phased out. Currently, 150 apprenticeship standards have been approved (across all industries) of which 5 are in construction with a further 21 construction related apprenticeships in development.
Apprenticeship standards will be of a minimum of 1 year duration and could last upto 5 years for a degree apprenticeship. When an employer feels that their apprentice has completed their apprenticeship, then they will be required to undertake an end point assessment. These assessments will vary according to the role.
An automotive repair & maintenance apprentice will undertake the following as their end assessment:
- An online knowledge test
- Practical Assessments
- Behavioural Assessment
For a construction management degree apprenticeship, the end point assessment is likely to be a professional review with Chartered Institute of Building (CIOB). End point assessments are conducted by an independent provider, not the training provider.
Currently when we think of apprenticeships, we probably think of traditional apprenticeships such as hairdressing, construction trades, car mechanics but there are a whole range of other apprenticeships available from actuarial, creative industries to law, human resources and nuclear.
As well as a wide range, there are also different levels of apprenticeships.
- Level 2 apprenticeship (Intermediate level) –equivalent to 5 GCSEs Trades
- Level 3 apprenticeship (Advanced level) – equivalent to 2 A-levels Some trades, technician & supervisory
- Level 4 -5 apprenticeships (Higher level) – equivalent to ONC,HNC, Foundation Degree. Technician level
- Level 6-7 apprenticeships (Degree) – equivalent to degree/masters
The government is putting more emphasis on the higher level apprenticeships (level 4+). The degree apprenticeships involve the apprentices undertaking a degree part time whilst working for an employer. This is a win-win situation as the apprentice is being paid, working towards a degree, gaining work experience and not running up a huge debt. Individuals can progress from 1 level to the next within the apprenticeship standards.
Currently colleges receive funding for training apprentices directly from the government. However, if the apprentice is over 19, the employer pays 50% of the cost and if over 24, the employer must foot the full cost.
You have probably heard about the apprentice levy in the press. The Apprentice levy comes in on 6th April 2017, at a rate of 0.5% of pay bill & paid through PAYE. It will only be paid where employers wage bill is in excess of £3 million & employers will have an allowance of £15,000 to offset against their levy. Those employers that operate throughout the UK will only pay apprenticeship levy on those employees based in England.
The apprenticeship levy will be used to pay for apprenticeship training and end assessments. So, rather than the government paying colleges to train apprentices, employers will draw down funding through the Digital Apprenticeship Service and negotiate with colleges.
But what about those companies that employ apprentices and have a wage bill under £3 million, you may ask?
Non-levied employers will be expected to co-fund apprenticeships, with the government paying 90% and the employer 10% of the training & assessment costs. Non-levied employers will continue to pay the provider directly and will move onto the digital system at a later date.
The cost will be spread over the duration of the apprenticeship, with 20% being held back until completion of the apprenticeship.
Digital funds will expire after 2 years if not used.
There will be an additional £1,000 funding for those employing apprentices aged 16-18 (or 19-24 formerly in care or with an Education, Health, Care Plan).
For apprenticeships that commence before May 2017, they will continue to be funded on the existing funding scheme.
Apprenticeship standards have been allocated to apprenticeship bands according to their level & type of apprenticeship. There are 15 funding bands. When a standard is approved it will be allocated a funding band and similarly for apprenticeship frameworks. The funding bands range from Band 1 at £1,500, band 9 at £9,000 to band 15 at £27,000.
A Property Maintenance Operative apprentice, level 2 is in band 9 (£9,000) and a Chartered Manager Degree Apprentice. Level 6 at £27,000.
The funding band is the maximum amount that the government will fund for apprenticeship training & assessment, taking into account the employers’ contribution of 10%. If an employer agrees to pay a training provider above the funding band then the government will only contribute upto the band & the employer will pay the additional element.
Digital Apprenticeship Service
The Digital Apprenticeship Service will enable companies to find registered training providers according to type of apprenticeship and postcode. You can also find out about what a particular apprenticeship involves. It will also be used to recruit an apprentice and manage your funding.
Training providers with an OFSTED rating higher than 4 for apprenticeship training provision will be allowed to register, those with a 4 rating will not be allowed to deliver apprenticeships, thus maintaining quality standards.
Institute for Apprenticeships
The Institute for Apprenticeships is a new independent body led by employers that will lie at the heart of ensuring the quality of apprenticeships in England. It will approve the apprenticeship standards and assessment plans.
So, you will see that a lot is changing on the apprenticeship landscape. Let’s recap on the main points.
- Apprenticeships are moving from frameworks to standards. Standards have been developed by employer groups. Standards have an end point assessment plan. An independent provider undertakes the end point assessment, once the employer feels the apprentice is ready. Apprenticeship frameworks will be phased out/replaced over time.
- An apprenticeship must last a minimum of 12 months. 20% of an apprentice’s time must be spent in off the job training.
- An individual can undertake an apprenticeship from level 2 to level 6/7. There are a wide range of apprenticeships available.
- The government is introducing an apprenticeship levy of 0.5% of payroll to those employers with a wage bill over £3 million.
- The way apprenticeships are funded is changing from May 2017. Employers will contribute 10% of the cost and the government 90%.
- Each apprenticeship will be allocated a funding band (1-15) which is the maximum amount the government will contribute. Employers can negotiate with training providers on the cost of training.
- Non-levied employers will contribute 10% and the government 90%.
- For those levy paying companies, their funding will expire if not used within 2 years.
- Companies can used the Digital Apprenticeship Service to find out about different apprenticeships, find a training provider, advertise their vacancy and manage their funds.
- Only training providers with a higher OFSTED rating than 4 for “apprenticeship training provision” will be allowed to provide apprenticeship training.
- If you employ an apprentice under 25, you no longer pay National Insurance employer or employee contributions for that individual.
- The current minimum apprentice rate is £3.40/hour (Oct 16). This applies to all apprentices in their first year of their apprenticeship. After a year their rate increases to that for their age (u18- £4.00, 18-20 – £5.55, 21-24 -£6.99, 25+ £7.20)
There are still some gaps in relation to apprenticeship levy with further information due out in December on calculating and paying the apprenticeship levy.
As a company, are you ready for these changes?
Have you considered the impact on your business?
If you want to have a discussion on how this will affect your business,
call Strive Development now on 01923 927085.