1. Learning at Work Week Apprenticeships update Webinar Series from Pearson in partnership with Campaign for Learning Apprenticeship Funding The large employer levy and funding for SMEs - what this means for your business 3 May 2016 1

2. Let us introduce ourselves… Julia Wright Campaign for Learning Siân Owen Head of Stakeholder Engagement (Funding) sian.owen1@pearson.com Gary Tovey Stakeholder Relations Manager 2 LAWW Webinar Series from Pearson | May 2016

3. Who are we? 3 LAWW Webinar Series from Pearson | May 2016

4. Apprenticeship Reform The Richard Review (2012) October 2013, the first employers were formed as “trailblazers” to design new apprenticeship standards and assessment approaches in England. The reform forms part of broader changes to the apprenticeships system outlined in the government’s 2020 vision: Funding rules, methodology, levy and SME funding 3 million target Legislation to protect the term “apprenticeship” and target public bodies in the Enterprise Bill Introduction of the Institute for Apprenticeships and Digital Apprenticeship Service (DAS) The reform/Trailblazers applies to England only 4 Illustration by Tang Yau Hoong) LAWW Webinar Series from Pearson | May 2016

5. Apprenticeships are changing: Comparison between SASE Frameworks and New Standards 5 SASE Frameworks (Multi-occupational) Trailblazer Apprenticeships (Single standard per job role/occupation) Initial Assessment On-the-job and off-the-job training including: NVQ and Technical Certificate Maths and English Personal Learning and Thinking Skills (PLTS) Employment Rights and Responsibilities (ERR) Completion and certification Occupational Competence On-the-job and off-the-job training including: Qualifications not mandatory – defined in standard and assessment plan – optional qualifications could be built in by provider/assessment organisation Maths and English Formative assessment of behaviours Initial Assessment Gateway – Employer and provider sign off learner ready for End Point Assessment End Point Assessment Completion and certification Occupational Competence LAWW Webinar Series from Pearson | May 2016

6. To cover The big picture The levy The levy and the devolved nations The digital apprenticeship service (DAS) Frameworks and standards Funding models Unknowns, and when we will know Challenges What it means 6 LAWW Webinar Series from Pearson | May 2016

7. The big picture 3m new apprenticeship starts in England between 2015 and 2020. To support investment, levy from 6 April 2017, paid by 2% of UK employers. To raise over £3bn a year by 2019-20, £2.5bn for apprenticeships in England. By 2019- 20 spending on apprenticeships (including levy) double that of 2010-11. 7 LAWW Webinar Series from Pearson | May 2016

8. The levy Charged at rate of 0.5% of annual pay bill. Levy allowance of £15,000 per year – only those with pay bill > £3m a year will pay. Paid to HMRC through Pay as You Earn (PAYE). Allowance operates on monthly basis and accumulates throughout year (£1,250 per month). Unused allowance carried from one month to next. If there is unused allowance in a month, but levy paid previously in tax year, credit can be used to offset other PAYE liabilities/reduce levy paid. Employers with multiple PAYE schemes who do not use full allowance can offset amount against another scheme once tax year ended. Where group of employers connected – only one allowance. Government will introduce rules so allowance must be set for each employer at beginning of tax year. Employers that are not connected will not be able to pool funds. Employers will access funding through new digital apprenticeship service (DAS), available for registrations from January 2017. Government will top-up funds by 10% – top up applied on monthly basis. Funds will expire 18 months – first-in/first-out basis. Can only be spent on own employees in first year, not on supply chain – government assessing this for future and will provide further information in June. 8 LAWW Webinar Series from Pearson | May 2016

9. The levy and the devolved nations Levy applies to employers across the UK. Apprenticeships a devolved policy – authorities in UK nations manage own apprenticeships, including how funding spent on training. Digital apprenticeship service (DAS) will support English apprenticeship system. Scotland, Wales and Northern Ireland have own arrangements for supporting employers to access apprenticeships. To calculate how much levy payers have to spend through English system government will use data held on home address of your employees to work out % of pay bill paid to employees living in England – assessment made early 2017, exact date to be announced in advance. Employers can update employees address as part of Real Time Information returns. Government testing accuracy and suitability of approach – more details in October 2016. 9 LAWW Webinar Series from Pearson | May 2016

10. The digital apprenticeship service (DAS) Registration opens January 2017. Helps employers: Select apprenticeship framework or standard Choose provider/s to deliver training Choose assessment organisation Post apprenticeship vacancies. From April 2017, levy payers can also use it to: See funds available to spend in England Set price agreed with training provider Pay for training and assessment. For non-levy payers, DAS will be in place 2018 (earliest), 2020 (latest). So, all employers will use DAS to pay for training and assessment by 2020. 10 LAWW Webinar Series from Pearson | May 2016

11. Frameworks and standards Original plan to stop funding frameworks in 2017/18, only standards available from 2018/19 (October 2013) now scrapped. In ‘English Apprenticeships: Our 2020 Vision’ report (December 2015). Said announcement of levy warrants giving employers longer to consider which occupations they will require apprenticeships for, and to allow for this envisage migration from frameworks to standards over the course of Parliament, as much as possible to take place by 2017/18. 2020 now end date for complete switch. SFA published in March 2016 list of 7 frameworks closed to new starts from 1 June 2016. No starts on these frameworks in 2014/15 or 2015/16. First in series of batches to be removed. 11 LAWW Webinar Series from Pearson | May 2016

12. Funding models 12 LAWW Webinar Series from Pearson | May 2016 Up until levy introduced April 2017 FrameworksStandards Contributions50% emp (expected), 50% gov33% emp (mandated), 66% gov How paid Emp contribution to provider to agreed schedule, gov contribution to provider via SFA contract Who funding can be spent on Employer apprenticeships Cap on overall demand Funding allocations subjects to caps on growth Funding rates Rates assigned to qualifications within framework, extra funding to recognise costs of apprenticeship added to competency qualification, rate based on modelling of activity costs Each standard allocated to one of six funding caps, cap sets maximum core government contribution, rate based on modelling of activity costs Government contribution for 16-18 year-olds Fully funded Incentive payments depending on funding cap (£600-£5,400) Government contribution for English and maths Government pays for level 1 and 2 English and maths required for framework

13. Funding models 13 LAWW Webinar Series from Pearson | May 2016 After levy introduced April 2017 Levy payers (2% businesses) Non-levy payers* (98% businesses) Contributions 91% emp (levy), 9% gov Once levy spent, same model as non-levy Small % emp, large % gov, from leftover levy? detail unknown, proposals in June, confirmation in October How paid Emp and gov contribution into DAS, to provider via DAS Emp contribution to provider to agreed schedule, gov contribution to provider via SFA contract, DAS 2018 (earliest), 2020 (latest) Cap on overall demand Limited to levy paymentsUnknown Who funding can be spent on Levy payers’ apprenticeships only for first year, government considering options for future Non-levy payers’ apprenticeships only Funding rates Funding bands, but details unknown, proposals in June, confirmation in October Government contribution for 16-18 year-olds Employers will receive payment to help meet extra costs, paid through training provider – rate unknown Unknown, proposals in June, confirmation in October Government contribution for English and maths Government pay providers directly for level 1 and 2 English and maths required Unknown, proposals in June, confirmation in October * And levy payers where spending more than their levy.

14. Unknowns, and when we will know June 2016 Provisional – funding bands, government contribution for non- levy payers, funding for 16-18s, and English and maths Eligibility rules re who and where funding can be spent Further information on who can deliver, and how organisations can set themselves up to deliver. October 2016 Final – funding bands, government contributions for non-levy payers, funding for 16-18s, and English and maths Full, draft funding and eligibility rules. December 2016 Final funding and eligibility rules Further employer guidance from HMRC on how to calculate and pay levy. 14 LAWW Webinar Series from Pearson | May 2016

15. Challenges Role of the Institute for Apprenticeships (IfA). What levy can be spent on – other training/support. Pooling the levy and supply chain apprenticeships. The digital apprenticeship service (DAS). Lead in times. 15 LAWW Webinar Series from Pearson | May 2016

16. What it means Levy payers Will you be paying the levy, and how much? What is your current level of apprenticeship training and could you usefully do more? Could you usefully deliver higher level or degree level apprenticeships? Do you want to become a training or assessment provider? Non-levy payers Government contributions will continue and cover ‘large proportion’ of costs. In a supply chain of businesses that pay the levy? (I.e. Rules may change in future). 16 LAWW Webinar Series from Pearson | May 2016

17. Pearson’s total solution package Expert advice and guidance on how to transition to the new apprenticeship standards A growing number of new apprenticeships across a range of sectors and occupations available today quals.pearson.com/apprenticeships A full suite of BTEC Apprenticeships in over 35 sectors across 250 pathways Personalised, tailored traineeships to support progression into apprenticeships, higher education and employment Dedicated support – a named, Pearson contact Networking – Linking you to other support e.g. Provider Readiness Groups and Trade Associations 17 Illustration by Tang Yau Hoong) Illustration by Tang Yau Hoong LAWW Webinar Series from Pearson | May 2016

18. Questions?

19. There’s so much more to learn E: wblcustomerservices@pearson.comwblcustomerservices@pearson.com W: quals.pearson.com/apprenticeships T: 0844 576 0045 (Private Training Providers/Employers) T: 0845 373 0114 (FE Colleges)

20. Next Webinars Apprenticeship reform - standards, assessment and quality - how this will be delivered Monday, 9 th May 3:30 PM - 4:10 PM Setting up an Apprenticeship programme Tuesday, 10 th May 3:30 PM - 4:10 PM Sign up at www.learningatworkweek.com