Insight#6 Progress towards the new funding regime

Hello. We’re just setting up and will start shortly. You should be able to hear the presenters sound checking.

Having problems? ContactFECustomerTrainingEvents@pearson.comOR 0845 373 0114

#6. Progress towards the new funding regime

Insight webinars for apprenticeships.

6 December 2016

Housekeeping

quals.pearson.com/apprenticeships

For technical support during the eventUse the chat window and our support team will respond

We’ll go into more detail on topics later in the seriesWe’ll run further events every few weeks for as long as

Slides will be sent you post-event

Housekeeping

4Insight webinars for apprenticeships.

Insight webinars for apprenticeships. 4

HousekeepingFor technical support during the eventUse the chat window and our support team will respond

We’ll go into more detail on topics later in the seriesWe’ll run further events every few weeks for as long as people find them useful.

Slides will be sent you post-event

quals.pearson.com/apprenticeships

Insight webinars for apprenticeships. 5

InteractingThere will be a Q&A session at the end of the event.But your microphones are off by default.

You can ask a question at any time using the chat windowWe won’t answer immediately but will pause between sections to summarise keypoints of interest.

quals.pearson.com/apprenticeships

Insight webinars for apprenticeships. 6

Your presenters

Gary ToveyHead of Employer and Strategic Partnerships

Lisa WallmanMarketing Manager

Siân OwenHead of Stakeholder Engagement

(Funding)

Insight webinars for apprenticeships. 7

To cover1. The digital apprenticeship service (DAS)

2. Institute for Apprenticeships (and Technical Education)

3. What is changing:

New Register, May 2017

Levy, April 2017

Frameworks to standards, ongoing

Funding, May 2017

4. Key documents and Pearson summaries

5. Questions

1. The digitalapprenticeshipservice (DAS)

Insight webinars for apprenticeships. 9

Digital apprenticeship service (DAS) All employer will have access to a digital apprenticeship service (DAS) through which

everything from choosing an apprenticeship and certification will be channelled.

From May 2017 levy payers will also use it to pay for training. Employers will have a digital account and apprenticeship funds will be paid into the account via DAS which employers then use to pay providers (or themselves in some cases) for apprenticeship training.

By 2018 earliest, 2020 latest, every employer in England will use the system to pay for apprenticeship training.

400 employers and 200 training providers have tested system. More invited to take part in testing during October and November 2016; representative sample selected and testing service from start to finish.

2. Institute forApprenticeships(and Technical

Education)

Insight webinars for apprenticeships. 11

Institute for Apprenticeships (IfA) Independent and employer-led Institute for Apprenticeships be created in April 2017.

Role will include regulating the quality of apprenticeships.

Following Sainsbury Review and the Post-16 Skills Plan: will be renamed Institute for Apprenticeships and Technical Education, and responsible for post-16 framework.

Will have remit to develop coherent strategy and put employers at the heart of designing standards across all technical education – college-based as well as apprenticeships.

Final remit not clear but direction of travel is for a much larger role.

Peter Lauener appointed Shadow CEO (on part-time basis alongside his responsibilities as CEO of SFA and EFA), permanent CEO will be appointed 2017.

3. What ischanging

Insight webinars for apprenticeships. 13

What is changing New Register, May 2017

Levy, April 2017

Frameworks to standards, ongoing

Funding, May 2017

Text in blue italics shows new rules confirmed in October after consultation on proposed rules from August.

Whatis changing:

New Register,May 2017

Insight webinars for apprenticeships. 15

New Register, May 2017New register (RoATP) for delivery from May 2017; all providers, even if on ROTO, will need to apply.

3 application routes – depend on how operating and who delivering to:

Main: for providers who can be selected by levied employers, and by other mains to work as subcontractor.

Supporting: for providers offering specialism, and who only want to deliver as subcontractor, able to deliver up to £500,000 training per year, before being required to apply to the main route.

Employer-provider: for employers who want to provide training to own staff (main or supporting).

Need to pass tests in financial health, due diligence, quality, capacity and capability, differentiated according to route.

Organisations delivering <£100k training per year as subcontractor don’t need to be on RoATP. (Original proposal: any organisation wanting role in delivery needs to be on RoATP.)

All main providers need to directly provide training for each employer’s apprenticeship programme, but not significant majority. If employer’s request and agree, mains can also bring in subcontractors to deliver whole/part of programme. (Original proposal: main would always need to deliver significant majority of programme).

SFA will continue to monitor and consider making further changes if concerns about quality and levels continue.

During first year parent company guarantees will be accepted for applications to give providers time to adapt to new requirement. (Original proposal: no longer accept parent company guarantees for applications to register.)

Open four times a year for new applications. SFA will reopen as soon as the results from the first round are available.

First selection of providers drawn from those who completed applications by 25 November 2016, 5pm.

SFA ran procurement exercise for delivery to employers that will not use digital account.

Organisations needed to apply to RoATP main route and complete invitation to tender by 25 November 2016, 5pm.

If successful, contracts will begin 1 May 2017 and end 31 July 2018.

What ischanging:Levy, April

2017

Insight webinars for apprenticeships. 17

Levy, April 2017 On pay bill of UK employees at rate of 0.5%, and allowance of £15,000 each tax year.

So, payable on pay bills over £3 million (0.5% x £3 million = £15,000).

Amount paid into employers’ levy accounts based on employees living in England, can be spent on employees working in England.

Levy calculator estimates if organisation will pay, how much they will have available to spend, and how much government will contribute.

Calculation first run February 2017 and then quarterly in July, October, January and April each year, employers report and pay to HMRC through PAYE process alongside income tax and NI.

Government makes 10% top up to monthly fund.

Funds expire after 24 months.

Once levy used, move over to system for non-levy paying employers.

Insight webinars for apprenticeships. 18

Levy, April 2017: Sharing levy funds In 2018 levy-paying employers will be allowed to

transfer up to 10% of the annual value of funds entering their digital accounts to other employers or ATAs.

New employer working group created by DfE to help further develop proposals for a transfers system that works for employers.

Will undertake research into needs of employers of all sizes, help government design how transfers should work, decide level of funds that could be transferred, and controls needed.

What ischanging:

Frameworks to standards,

ongoing

Insight webinars for apprenticeships. 20

Frameworks to standards, ongoingSFA expects to move from frameworks to standards over course of parliament (2020) with most frameworks being phased out and standards in place by the start of funding year 2017/18. Withdrawal phased and notice will be given.

7 frameworks were withdrawn.

Consultation on further 55 frameworks to be withdrawn from April 2017.

56 frameworks will be withdrawn

2 frameworks will be withdrawn.

55 frameworks possibly withdrawn (consultation above).

June2016

July2016

Dec2016

April2017

Insight webinars for apprenticeships. 21

Frameworks to standards, ongoing

SASE Frameworks(Multi-occupational)

New apprenticeship standards(Single standard per job role/occupation)

Comparison between SASE Frameworks and new standards

Initial assessment

On-the-job training and off-the-job training including:NVQ and Technical Certificate

Maths and EnglishPersonel Learning & Thinking Skills (PLTS)

Employment Rights and Responsibilities (ERR)

Completion and certification

Occupational competence

Initial assessment

On-the-job training and off-the-job training including:Qualifications not mandatory – defined in standard assessment plan – optional

qualifications could be built by provider/assessment organisationMaths and English

Formative assessment of behaviours

Gateway:Employer and provider sign off

learner ready for end-point assessment

End-point assessment

Completion and certification

Occupational competence

Day 1

Initialassessment

On Programme

Learning

AssessmentGateway

Completion

End Point Assessment

What ischanging:Funding,May 2017

Insight webinars for apprenticeships. 23

Funding, May 2017: Start of the new system

Start date for new apprenticeship funding system 1 May 2017.

Any apprenticeships started from this date funded according to new rules.

This will apply to all employers; levy paying, and non-levy paying.

Apprenticeship levy comes into effect on 6 April 2017, funds will appear in employer’s digital account just before the end of May for levy paid on April payroll.

Payments made to providers under new system monthly in arrears for training they report delivered.

Insight webinars for apprenticeships. 24

Funding, May 2017: Prior qualifications Employers can use funding to train

individuals on apprenticeship at same or lower level than previous qualification/ apprenticeship if it allowed them to acquire substantive new skills, and content materially different.

Insight webinars for apprenticeships. 25

Funding, May 2017: Components The levy

How funding will flow

Employer contribution

Funding rates

Additional payments

Funding flow Contribution Rates Additional Payments

Levy Frameworks and standards

Frameworks and standards

Frameworks Standards Standards

Non-levy Frameworks and standards

Frameworks and standards

Insight webinars for apprenticeships. 26

Funding, May 2017: How funding will flowFunding flow

Frameworks and standards

Levy Non-levy

Employer and government contribution into DAS. Paid by employer to provider via DAS.

Employer contribution paid to provider according to agreed schedule, government contribution to provider paid via SFA contract. All employers will use DAS to pay for training and assessment by 2018

earliest, 2020 latest.

Insight webinars for apprenticeships. 27

Funding, May 2017: Employer contributionsContributions

Frameworks and standards

Levy Non-levy

Price negotiated between employer and provider.

Employer pays 100%.

Once levy spent, employers use same model as non-levy payers.

Price negotiated between employer and provider.

Employers co-invest 10%, government co-invests 90% (mandatory).

Small employers (<50) do not have to co-invest 10% for 16-18s, 19-24 care leavers or 19-24s with a LA EHC plan; government pays 100%.

Insight webinars for apprenticeships. 28

Funding, May 2017: Funding ratesRates

Levy and non-levy

All apprenticeships allocated to one of 15 funding bands, upper limit from £1,500 to £27,000. Upper limit caps maximum funds levy-paying employer can use towards apprenticeship, and maximum government will ‘co-invest’ towards for non-levy paying employer. Final funding negotiated, can go above maximum but then 100% employer’s own money.

Frameworks Standards

All frameworks allocated to a band. Some frameworks allocated to higher bands than originally in August.

All frameworks allocated to a band. Some standards allocated to higher bands than originally in August. New system will recognise standards are ‘more expensive to deliver’ by allocating higher

funding bands to apprenticeship standards, relative to equivalent frameworks.

Insight webinars for apprenticeships. 29

Funding, May 2017: Funding bandsNumber Upper band 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

Insight webinars for apprenticeships. 30

Funding, May 2017: Additional paymentsAdditional payments

Frameworks and standards

Levy and non-levy

16-18 year-olds £1,000 to employer and £1,000 to provider. 20% of funding band maximum, for those on frameworks, to provider.

Disadvantage For 19-24 year-old care leavers or with an LA EHC plan £1,000 to employer and £1,000 to provider. 20% of funding band maximum, for those on frameworks, to provider.

£600 for those on framework living in top 10% of deprived areas (as per IMD), £300 for those living in next 10%, £200 for those living in next 7%. In place for the first year, will review best ways of ensuring equal opportunity to all, regardless of circumstances.

English and maths Flat rate of £471 for each subject to provider.

Support funding £150 each month can be claimed by providers for apprentices with learning or physical disabilities requiring extra learning support. Where evidence of greater learning support needed additional funding may be provided.

Insight webinars for apprenticeships. 31

Funding, May 2017: Comparing old and new

Current

Frameworks Standards

After May 2017

Frameworks Standards

Funding, May 2017: Comparing old and newCurrent Frameworks Current Standards New Frameworks New Standards

Negotiation

Basic rate Based on qualifications Standard cap Framework band Standard band

Age 16-18 (full)19-23 (50%) 24+ (-20% of 19-23 rate)

16-18 payment 16-18s £1,000 to employer and £1,000 to provider, and 20% of funding band maximum to provider

16-18s £1,000 to employer and £1,000 to provider

Employer contribution

50% optional 33% mandatory Levy paying employers 100% mandatory Non-levy paying employers 10% mandatory

Employer reduction/incentive

25% large (> 1000) employer reduction

Small (< 50) employer payment

Small (< 50) employers do not contribute for 16-18s, 19-24 care leavers or with LA EHC plan; government pays 100%

Achievement/success 20% achievement rate Success payment 20% paid at end of apprenticeship 20% paid once EPA completed

Disadvantage Uplift (IMD) 19-24 care leavers/with LA EHC £1,000 to employer and £1,000 to provider, and 20% of funding band maximum to provider £600 living in top 10% of deprived areas (IMD),

£300 living in next 10%, £200 living in next 7% achievement rate

19-24 care leavers/with LA EHC £1,000 to employer and £1,000 to provider

Area uplift

English and maths 16-18 £471, 19-23 £362, 24+ £290 to provider

£471 for each subject to provider

£471 for each subject to provider

Learner support

4. Keydocuments

and Pearsonsummaries

Insight webinars for apprenticeships. 34

Key documentsOverview

Justine Greening’s written ministerial statement on supporting apprenticeships.

Press release: New apprenticeship funding to transform investment in skills.

Funding, and the levy

Apprenticeship funding from May 2017: How apprenticeship funding will work, including funding bands.

Apprenticeship technical funding guide for starts from May 2017: Technical details of the new funding system.

Apprenticeship funding and performance management rules 2017 to 2018: Draft rules that will apply.

Apprenticeship funding: how it will work (the levy): Details of the levy for employers.

A revised apprenticeship funding calculator: To help employers understand what levy they will pay and how they could use the new digital service to plan and fund training.

SFA Digital blog: to help people keep up to date with the development of the DAS.

Register of apprenticeship training providers (RoATP)

Working with the SFA as an apprenticeship training provider: Information for all providers who wish to offer apprenticeship training in England from May 2017.

Register of apprenticeship training providers: Brings together guidance on how to apply to the RoATP.

Apprenticeship employer-provider guide: What employers need to do to become an apprenticeship training provider.

SFA presentations: register of apprenticeship training providers, and invitation to tender: apprenticeship training delivery for employers without a digital account.

Insight webinars for apprenticeships. 35

Pearson summariesPearson Handy Guide to Apprenticeship reform is designed to give a quick overview of Apprenticeship reform in England. It is written to help you understand the different changes that are currently being implemented or that are due to be introduced throughout 2016, 2017 and beyond.

Pearson Funding Focus:

The Apprenticeship levy from April 2017

Apprenticeship funding from May 2017

Confirmed allocation of frameworks and standards to new funding bands from May 2017

Comparing existing apprenticeship funding with new apprenticeship funding from May 2017

The new register of apprenticeship training providers (RoATP)

Funding News brings you a weekly funding update. Sign up here or email funding@pearson.com

For funding queries, email funding@pearson.com

5. Questions

Insight webinars for apprenticeships. 37

Keep in touchTwitter

Linkedin

Insight newsletter

Our Insight blog

Future Insight webinars

Funding Focus

Handy Guide

quals.pearson.com/apprenticeships

Image creditsIllustration by Tang Yau Hoong and Lucy Vigrass