1. A funding update for Apprenticeships May 27 th 2010, BTEC Apprenticeship launch event Nick Linford Head of the Pearson Research Institute

2. Content of the presentation > Investment for 2010-11 and changes this week > Investment for 2010-11 compared to 2009-10 > Apprenticeship national funding rates > Further reductions to 19+ apprenticeship rates > Apprenticeship demand and ‘the 16-18 problem’ > Summary and what next > Bedtime reading

3. £0 £200m £400m £600m £800m £1bn £1.2bn Appren 16-18Appren 19+Train to Gain Original 2010-11 budget Announced this week + £150m (+38%) - £200m (-20%) Investment for 2010-11 and changes this week* * Financial year Apr-Mar (England) £50m for FE capital

4. Investment for 2010-11 compared to 2009-10 * Financial year Apr-Mar (England) £0 £200m £400m £600m £800m £1bn £1.2bn Appren 16-18Appren 19+Train to Gain + 16% + 50% - 15% 2009-10 2010-11

5. Apprenticeship national funding rates £1,000 £1,500 £2,000 £2,500 £3,000 £3,500 16-1819-2425+ 2009/10 2010/11 £2,817 £2,535 £2,920 No change £2,920 £2,732 - 3% £2,186 - 14%

6. Further reductions to 19+ Appren rates* > All 19+ Appren co-funded, so funding halved > Additional 25% reduction for large employers > 2010/11 rates will apply to all payments from Aug ’10, even if employee started in 2009/10 Comparing rates (extreme example): 16-1825+ large employer £2,920 £820 72% lower rate Expected that employer contributions plug much of this funding gap * See Skills Funding Agency guidance note 3

7. Apprenticeship demand and ‘16-18 problem’ 25+ 19-24 16-18 - 7% - 6% + 106% 0 20,000 40,000 60,000 80,000 100,000 120,000 2005/062006/072007/082008/09 Apprenticeship starts by age and year* * Source : March 2010 Statistical First Release No change since 2005/06 13% increase since 2005/06 “Apprenticeship starts have increased to a record 240,000 in 2008/09”….but…… Gov. planned 29k and got 56k

8. So how is this year (2009/10) going? * Source : March 2010 SFR, 2009/10 figures provisional 25+ 19-24 16-18 Apprenticeship starts by age (01/08/09 – 31/01/10)* -2% +14% -35% Clearly concern is 16-18, with 7% fall in starts for 2008/09, and 2% less for first half of 2009/10* 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2007/082008/092009/10

9. Summary and what next > Rate reductions for 19-24, 25+ and large employers > Too little demand for 16-18 and too much (?) for 25+ > SFA meeting UKCES today to discuss: Timetable for publishing QCF and framework rates > New Gov. increasing 2010/11 Appren allocations for SMEs > Rate reductions from Aug ’10 include carry-in learners Timetable for SASE compliant frameworks Rate setting arrangements to avoid bottleneck

10. Bedtime reading for Apprenticeships “Full Delivery Plan will be published in July, and will incorporate any changes that the new government intend to make to policy for academic year 2010/11” SFA Guidance Note 3 Earned Autonomy SFA weekly update 8

11. Oh, and my hands-on guides! www.fundingguide.co.ukwww.dataguide.co.uk

12. Thank you Find out more about the Pearson Research Institute visit www.pearsonresearchinstitute.com P.S. Visit www.pearsonresearchinstitute.com to sign-up for the Train to Gain and Apprenticeship Funding Masterclass on 29 th June 2010 in London www.pearsonresearchinstitute.com