Four changes in the apprenticeship announcements you need to know

Four changes in the apprenticeship announcements you need to know

This morning FE Week was the first to report that the Department for Education had released documents confirming the level of funding for apprenticeships from May 1, 2017. Click here.

The three week consultation on the provisional proposals began on the August 12 and had 892 responses, but the government had feedback via other means including FE Week’s #SaveOurApprenticeships campaign.

Key changes to the proposals in the consultation:

1. Extra 20 per cent of funding band limit for 16-18 year-olds (in addition to the £1,000 provider and £1,000 employer incentive)
FE Week and many others highlighted that moving to a ‘simplified’ single funding level would cut 16-18 rates. This is because the single rate chosen for existing frameworks was based on the much lower level of funding for adults.

In response Robert Halfon, the apprenticeships and skills minister, told FE Week: “Since announcing the proposals for apprenticeship funding, we have listened hard to all the feedback we have received to ensure people can gain the skills they need now and for the future.

“In order to help providers adapt to the new system, we are introducing an additional cash payment equal to 20 per cent of the funding band limit when they train a 16-18 year old on apprenticeship frameworks.”

Key features:

> It is 20 per cent of the upper-limit value for the framework (does not apply for standards). See framework funding bands here
> It’s a one year “transitional measure designed to support stability whilst providers adjust to the reforms”
> It will “also apply to 19-24 year olds who were formerly in care or who have an Education and Health Care plan”
> It will be funded by the Skills Funding Agency and won’t be deducted from an employer’s levy account

2. £60m of “additional support in areas of disadvantage”
When the SFA published funding proposals in August, it quietly excluded the current disadvantage uplift. This pays up to 32 per cent more funding for apprentices living in the most deprived areas (as per the Index of Multiple Deprivation). FE Week and many others pointed out not only that this would cut funding for the most disadvantage hardest and was a decision which didn’t feature in the three week consultation. Also, the three government advisory groups were told.

In response, the apprenticeship minister told FE Week: “I am committed to ensuring that, regardless of background or ability, everyone in the UK has the opportunity to benefit from an apprenticeship – whether to take their first step on the career ladder or progress within their career. That’s why we’re investing £60 million in supporting the training of apprentices from the poorest areas in the country to ensure social mobility for all.”

Key features:

> Providers will receive an additional £600 for training on a framework an apprentice who lives in the top 10 per cent of deprived areas (as per the Index of Multiple Deprivation)
> Providers will receive an additional £300 for any apprentice who lives in the next 10 per cent of deprived areas (the 10-20 per cent range)
> Providers will receive an additional £200 for those in the next 7 per cent (the 20-27 per cent range)
> “Overall, government will make available at least the same amount on disadvantage payments as under the current system of more complex uplifts”
> “These payments will come direct from the government and will not be deducted from an employer’s digital account”
> “This will be in place for the first year while we review the best ways of ensuring apprenticeships provide equal opportunity to all, regardless of their circumstances.This review will look at the role of employers, as well as training providers, and the differences in approach that may be needed in different parts of the country. We will work with Opportunity Areas to develop and test different approaches”

3. Expiry of funds in digital accounts extended from 18 to 24 months
The proposal was that levy funding would ‘sun-set’ after 18 months. In other words, an employer would lose access to a monthly fund if it was not used within 18 months.

In response, the government said: “We received feedback from employers and representative groups that a longer expiry period would help employers prepare for the new system and adapt and scale their training programmes. Employers also highlighted that many new high quality standards on which they would like to train apprentices are still being developed. Employers suggested that 24 months would be more consistent with an annual planning cycle.”

4. Softening of new provider register rules and back-peddling on subcontracting

The SFA has also today published a guide to the new Register of Apprenticeship Training Providers. This was intended to be more rigorous that the existing SFA provider register, which will continue for non-apprenticeship provision. However, the final proposals appear to have been significantly watered down.

Key features:

> Many subcontractors will not even need to be on the new register: “For the time being, we will retain the threshold, which means that organisations who want to deliver less than £100k of apprenticeship training per year as a subcontractor will not need to apply”
> Plans to force the main  provider to deliver at least half the training for each apprentice have been dropped.  Instead the government has said: “We appreciate that maintaining the ability to subcontract will, at least for a transitional period, be important for employers and providers. Therefore, we will require that all approved ‘main’ providers will need to directly provide training for each employer’s apprenticeship programme that they deliver, but we will not require the main provider to deliver a significant majority of each framework or standard they contract with an employer to deliver. At the employer’s request, and subject to their agreement, main providers will be able to bring in subcontractors to deliver whole, or parts of, frameworks or standards”
> Despite the proposals to no longer accept parent company guarantees for applications to the register, this has also been scrapped. Government now says: “during the first year, we will continue to accept parent company guarantees for applications to give providers time to adapt to the new requirement”

The document also says the new register will open for applications today: “Further details of the new register will be set out in accompanying guidance and funding rules. Our first selection of assured providers will be drawn from those who complete their applications by 5.00pm on 25 November 2016.”

More information will be shared as and when published, such as the procurement for non-levied funding and applications to the new provider register.

Documents published this morning:

> Apprenticeship funding in England from May 2017

> Apprenticeship frameworks: funding bands from May 2017

> Apprenticeship standards: funding bands from May 2017

> Supporting quality and employer choice through a new register of apprenticeship training providers

> Apprenticeship funding: how it will work

> Equality analysis: apprenticeship funding policy from May 2017

> Costs and behaviours in the 16 to 18 apprenticeship system: a report by Frontier Economics and CFE Research

> The apprenticeship levy: how will employers respond?

> Apprenticeship funding: rules and guidance for levy-paying employers

> Apprenticeship funding: draft rules for employer-providers

> Apprenticeship funding: draft rules for training providers

> Draft apprenticeship performance management rules 2017 to 2018