Bosses face apprentice bill of up to £9k

Providers could receive up to £27,000 for every apprentice they train — but £9,000 of that cash would have to come from employers and the rest from the Skills Funding Agency, FE Week can reveal.

And further public money, including extra cash for 16 to 18-year-old apprenticeships, could push the figure above £37,000.

The figures are for a pilot employer-led funding model in which government pays 67 per cent and employers 33 per cent. They were released to FE Week by the Department for Business, Innovation and Skills (BIS) and are for the first Trailblazers’ group. They come in five funding bands ranging from £3,000 to £27,000.

However, the government has said it wants employers to shop around so that they might lower their own — and therefore the taxpayers’ — actual contribution [click here to download the BIS stakeholder briefing].

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It is believed to be the first time a mandatory cash contribution will have been required from apprentice employers. It comes two years after a review of apprenticeships by former BBC Dragons’ Den investor Doug Richard recommended an employer-led system.

The government has not revealed how it will pay its share with the results of the latest consultation, which ended on May 1, proposing a PAYE or credit account system yet to be published.

Association of Employment and Learning Providers chief executive Stewart Segal said: “The proposals include the principle of mandatory cash contributions which we know will be a barrier for some.”

He added: “The process of monitoring employer contributions will be an important part of the pilot. We will need to carefully monitor the impact of the pilot although the Trailblazers may not be typical of the majority of apprenticeships.”

A BIS spokesperson said: “We will also provide additional incentives for completion [10 per cent], for small businesses [10 per cent and defined as fewer than 50 staff, paid to the employer] and for apprentices aged 16 to 18 [20 per cent]. This is a simple, fair system that will support employers to sit in the driving seat of the apprenticeships system in future.”

English and maths funding for apprenticeships, worth up to £1,000 per learner, would be in addition to these figures and would come entirely from the government.

Editorial

Time to improve reform, not fight it

The details of the government’s first ‘employer-led’ apprenticeship funding pilot are out.

But many will not forget the government ignored the vast majority of responses to the first apprenticeship funding consultation, and it is less than a month since the second consultation ended — before the latest set of results have been shared.

Cynics might therefore point to this announcement being more evidence of not listening to what both employers and the sector have said.

But the Minister is not for turning, and to be fair has made it clear he’s flying the Doug Richard flag.

So let’s move the debate on, and look at the detail.

Providers will now have to secure cash from the employer. A good thing.

But how will the sector cope now with negotiating on price, potentially driving it down — and quality with it?

And how does price negotiation work for employer providers, who are both the customer and the supplier?

Fortunately, unlike apprenticeship loans, this new funding system is being piloted.

So as a sector let’s be solutions-focused, and work with the government to improve the reform during the pilots, and ensure even more employers take on even more apprentices.

Chris Henwood

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