Creating a more transparent apprenticeship funding approach

25 Aug 2020, 15:22

We are determined at the Institute to create a more transparent approach for making apprenticeship funding band recommendations that will support high quality training for many years to come.

We are always prepared to listen to feedback and think seriously about how we can improve our work.

This project emerged from us recognising the widespread view from employers and the wider sector that the existing system was not transparent enough.

I have been overseeing this work.

To recap, the Institute provides recommendations to the Secretary of State for Education on the maximum government contribution (the funding band) for each new apprenticeship. We also review funding bands for existing apprenticeships.

A funding band is an estimate of the typical, eligible costs for delivering the training and assessment of an apprenticeship. Employers pay apprentices’ wages themselves.

The funding band system supports employers, helping more to benefit from apprenticeship levy funding by delivering value for money in the programme. 

We launched our first wave of improvements in May last year.

This focused on demystifying how the current system works. It is based around employers gathering quotes for how much training costs and comparisons with existing standards and qualifications.

We then embarked on the much bigger task of creating a new approach for making funding band recommendations.

The three main aims throughout have been to be more transparent with our processes, place greater reliance on independent evidence, and provide the flexibility to reflect the particular needs of apprenticeships.

We are also seeking to strengthen value for money for both employers and the taxpayer through these improvements.

We commissioned a report by IFF Research into the actual costs of delivering apprenticeships and used this research to develop our model, which draws on average delivery costs.

Our first consultation, run between February and May this year, explained this and requested views on how to address differences in costs.

We were pleased to receive over 200 valued responses to the consultation.

The majority thought that the proposed model was simpler to understand and strengthened transparency.

We also recognised respondents’ views that more refinement was needed to strike a balance between having an easily understandable model and one which sufficiently addressed the reasons for variation in cost between difference standards.

That’s why we are now seeking views on our refined approach.

We used feedback to develop a single approach that provides trailblazers with an early indication of the funding band their apprenticeship stands to receive, based on an automated “rates-based” model. If a trailblazer considers this estimate to be inappropriate for their specific standard, they can provide information for us to make a bespoke estimate of typical costs.

Our consultation on this refined approach launched today and will run for 6 weeks, closing at midnight on 6 October 2020.

A series of virtual roadshow events will also take place during this period, helping interested organisations and individuals understand how the model might work.

If you have any questions you can also contact my team on

Once this consultation process has closed, and the Institute has responded with our key findings, we intend to conduct a pilot to ensure it works well in practice.

I would like to thank everyone for your valuable input so far. Your comments and the benefit of your combined experience is invaluable.

The Institute has gone to great lengths to listen to and act on your feedback.

We have come a long way together and your continued support can ensure we develop an approach that will work well. This is an important opportunity for everyone who cares about apprenticeships to let us know what you think.

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One comment

  1. I think there needs to be a realistic element in each funding band for the ever increasing administration required per apprentice and the internal quality systems required by training providers to satisfy ESFA, RoATP and Ofsted. The notion that a training providers role is completed when the apprentice has passed through EPA gateway is also laughable. There is yet more staff time required in dealing with the EPAO and liaising with employers to organise the EPA, and completion of venue H&S declarations, booking forms, invigilation and provision of resources to administer online exams and for some standards, providing the venue and resources for practical assessments. Who on earth thought that employers would take on this additional burden? Employer’s have enough to do in running their businesses, but training providers can not be expected to continue to administer this for free because someone, obviously far removed from the coal face, thought a new system would have employers rushing to take on this responsibility.