1. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Apprenticeships now and the proposed plans going forward Employer Update

2. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Why Employers Engage with Apprenticeships 80% Companies take on apprentices have reported a significant increase in employee retention 77% of employers consider Apprenticeships make them more competitive; 76% of those employers who employ apprentices agree this makes the workplace more productive. Around 81% of consumers prefer dealing with a company which employs apprentices. Employers who employ apprentices agree that Apprenticeships lead to a more motivated and satisfied workforce. Apprenticeships programme to provide Employers with the skilled workers that they need for the future. One in five employers are hiring apprentices to help them through the tough economic climate. Giving them employer growth at low cost

3. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Funding and delivery comparison The way it is Now Proposed Plans Skills Funding Agency Training Organisation Learning / Assessment Awarding Body Employer Contribution (Levy) SME payment DAS/ Skills Funding Agency Employer Training Organisation Awarding Body Assessment Learning

4. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Apprenticeship Funding and the Changes planned Provider control Provider funded for delivery of SASE framework Employer contribution expected but not always collected Transition Employers have more control over content of Standards Funding partially to employer (incentives) and provider Employer contribution in cash (£2 for every £1 from employer) Employer control Content and delivery controlled by employer Large employers pay 0.5% paybill tax as levy Employer uses digital voucher to pay for training and assessment 4

5. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Apprenticeship Levy: how it will work The purpose of the apprenticeship levy is to fund an increase in the number and quality of apprenticeships The levy will apply to all UK employers in both the private and public sectors. It is payable on annual pay bills of more than £3 million. Employers with an annual pay bill of less than £3 million will not pay the levy. These employers will continue to have access to government funding to support apprenticeships. In June 2016 we will provide further details of what that support is expected to be. Less than 2-3% of UK employers will pay the apprenticeship levy.

6. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup How much you will pay The levy will be charged at a rate of 0.5% of an employer’s pay bill. Levy payments will be collected monthly by HM Revenue and Customs (HMRC) through Pay as You Earn (PAYE), payable alongside tax and National Insurance. Pay bill will be based on total employee earnings subject to Class 1 secondary National Insurance Contributions (NICs). There will be a £15,000 fixed annual allowance for employers to offset against their levy payment

7. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Examples Example 1: Employer of 250 employees, each with a gross salary of £20,000 would pay: Pay bill: 250 x £20,000 = £5,000,000 Levy sum: 0.5% x £5,000,000 = £25,000 Allowance: £25,000 - £15,000 = £10,000 annual levy payment Example 2: Employer of 100 employees, each with a gross salary of £20,000 would pay: Pay bill: 100 x £20,000 = £2,000,000 Levy sum: 0.5% x £2,000,000 = £10,000 Allowance: £10,000 - £15,000 = £0 annual levy payment

8. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup What happens to the Levy The money will be collected by HMRC will be made available to them via a new Digital Apprenticeship Service (DAS) account. Employers will be able to use this to pay for training for apprentices. The service will also support employers to identify a training provider, choose an apprenticeship training course and find a candidate. The DAS will also enable employers to: select an apprenticeship training course choose the training provider or providers they want to deliver the training post apprenticeship vacancies The main functions of this service will be in place in 2017.

9. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Wage Saving If you have employed an apprentice since 6 th April 2016 you may not need to pay employer Class 1 National Insurance contributions (NICs) on their earnings below £827 a week (£43,000 a year).Class 1 National Insurance contributions (NICs) They must be under 25 years old and following an approved UK government statutory apprenticeship framework Evidence required If your apprentice meets the conditions above, you’ll need to have evidence to be able to apply the relief. This can be either: written agreement between you, the apprentice and a training provider in England and Wales, evidence that the apprenticeship receives government funding Written agreement must show: the government apprentice framework or standard a start and (expected) end date for their apprenticeship scheme If the training provider hasn’t signed the written agreement, they’ll need to provide a document that shows: they’re an approved (recognised) training provider the training your apprentice is undertaking, and any training already done Alternatively, in England and Wales, you can provide evidence of government funding of the apprenticeship. This could be the declaration to receive apprenticeship incentive

10. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Wage Saving Employees will continue to pay the standard rate of Class 1 NICs through their salary. They won’t see any reduction in their payments. It’s employers who’ll benefit from this change.

11. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Apprenticeship Reforms: Withdrawal of Frameworks As part of the apprenticeship reform programme, apprenticeship frameworks will be replaced by New Standards This will not affect those apprentices currently completing their apprenticeship on existing frameworks

12. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Spending the Levy Employers will be able to use their funding (up to a cap which will depend upon the standard or framework that is being trained against) to cover the costs of an apprentice’s training, assessment and certification. Employers will not be able to use levy funds to cover all the costs associated with taking on an apprentice. For example, overheads, supervision costs and apprentices’ wages will not be funded by the levy.

13. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Changing Content What is being removed? Employment Rights and Responsibilities disappears However, apprentices will still need good careers advice, information and guidance Personal Learning and Thinking Skills will be replaced by Behaviours; these will require specific training On Programme Assessments will be replaced by independent End Point Assessments

14. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup SMEs (organisations not qualifying for Levy) SMEs to stay on the current funding system until 2019

15. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Comparison of Framework and Standards Funding Frameworks (current system)Standards (newly planned) 2012/13 listed rates per qualification on LARS not linked to fee charged to employer Different rates per age group (16-18, 19- 24, 25+) Cost weightings, disadvantage and area cost uplifts Achievement 20% of funding paid to provider 25% discount for large employers with 1000+ staff 16-24 Apprenticeship Grant for Employers with less than 50 employees One of 6 capped rates per standard linked to fee Rate is the same regardless of age with 16-18 employer incentive only No disadvantage and area cost uplifts Successful completion payment to employer No incentive payment to employers with 50+ staff Small employer (less than 50 employees) incentive paid to employer

16. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Apprenticeships Standards Draft Funding Model 16

17. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Who provides the training Employers can only spend their levy funds on apprenticeship training delivered by an approved provider. This could be through buying in training from an approved provider or delivering the training themselves. To deliver training the employer would need to register as an approved provider and be subject to Skills Funding Agency (SFA) quality arrangements and Ofsted inspection. This may be onerous for employers tying them down with red tape

18. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Revolution in Assessments Training Providers will: have a diminished responsibility for assessing Increase added value to the Apprenticeship system; by including the delivery of high quality learning tailored to employers’ needs. Training standards will be specific to job families/roles and not sectors

19. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Institute for Apprenticeships (IfA) Over the next year or so the IfA will be working to ensure the organisation is ready to launch in April 2017, ensuring quality apprenticeships that meet the needs of businesses The IfA will help police employers as apprenticeship reforms take effect

20. Want to learn more about partnering with us? See our company page: https://www.linkedin.com/company/pathwaygroup Keep in Touch: https://uk.linkedin.com/in/safaraz https://www.facebook.com/pathwaygroup/ @pathwaygroup @SafarazAli Safaraz Ali (Saf) Safaraz@pathwaygroup.co.uk Eddie Cottis (Eddie) Eddie.cottis@pathwaygroup.co.uk Alternatively phone: 0121 707 0550