1. CHANGES TO APPRENTICESHIPS
UNDERSTANDING THE
CHANGES TO APPRENTICESHIPS
& THE OPPORTUNITIES FOR YOUR BUSINESS
Hello…
First in the series of webinars – DATES
Before we start, we’d like to get a better of who we have with us today…. POLL 1
PAULA GIBSON
APPRENTICESHIPS MANAGER

2. AGENDA Update on recent Apprenticeship Announcements/Proposals
How the Levy will work
The new Apprenticeship process for employers
Digital Apprenticeship Service
Tips for Developing your Apprenticeship Programme
Questions        

3. PROGRAMME OF REFORMS
The government is committed to significantly increase the quantity and quality of apprenticeships in England to reach 3 million starts in 2020:
Employers at the heart of designing new Apprenticeships Standards through the Trailblazer programme
Apprenticeships will be given equal legal protection to degrees
Abolishing employer NICs for apprentices under the age of 25 from April 2016
Apprenticeship targets for public sector bodies – consulting on new duty on public sector to have 2.3% of its workforce comprised of apprenticeships
But a step change in the scale and quality of the apprenticeship programme also requires a step change in funding and the introduction of an apprenticeship levy
New Institute for Apprenticeships led by employers to support quality apprenticeships

4. Apprenticeship Standards (new incoming)
Developed by groups of employers with support (BIS, Sector bodies)
Must be rigorously end-assessed by independent organisation/body.
Minimum length of 12 months duration
Must have a minimum of 20% of the programme as off the job training.
May, or may not have a qualification as intrinsic to the standard.
Lists knowledge, skills and behaviours (KSB) to be achieved as part of Standard.
Maximum of 2 pages in length.

5. NEW APPRENTICESHIP STANDARDS
What else is changing for employers, or what is the system to communicate to new employers?
Explain key differences
Frameworks -> Occupations
Quals not mandatory
No mandatory requirement for qualifications within all apprenticeships unless they are required for a “Licence to Practice” (LTP) or similar
Trailblazer groups can identify specifications which may lead to qualifications
Where qualifications are not mandatory, employers and providers can still build them into their apprenticeship programmes
Introduction of gateway
Introduction of independent end-assessment
POLL QUESTION
Is your organisation already delivering the new Apprenticeship Standards?
Yes No

6. THE APPRENTICESHIP LEVY
— SEVEN QUICK FACTS
1. The apprenticeship levy will come into effect in April It will be payable by employers in UK at 0.5% of paybill.
2. All employers will receive an allowance of £15,000 to offset against payment of the levy. This effectively means that the levy will only be payable on paybill in excess of £3 million per year.
3. Levy can only be used on apprentice training and assessment from an approved provider.
4. The levy is paid monthly through Pay As You Earn (PAYE) and will be payable alongside income tax and National Insurance.
5. The levy will apply to employers across all sectors, regardless of whether they employ apprentices or not.
6. Government will top up England levy contributions by 10%.
Payment for English and maths - £471 direct to providers, not taken from levy payments
What do we know now?
2. The levy (Nick Boles said on 27/6 at the AELP annual conference that the levy would go ahead as planned and further guidance is expected before breaking for summer.
April 2017, 0.5% of pay bill
Allowance means levy only payable on paybills in excess of £3million a year. Each employer will receive one allowance to offset against their levy payment so employers who operate multiple payrolls will still only be able to claim one allowance.
Levy can only be spent on apprentice training within their own organisations. BIS have advised that it could a possibility in the future that organisations will be able to share their levy with other organisations in their supply chain.
Will be colleted by HMRC via PAYE along with the employer’s income tax and National Insurance
Applies to all sectors, including charities, providers and universities. If an organisation already pays a levy such as the Construction levy, the apprenticeship levy still applies.
Levy will only be able to spent on apprentice training in England. Will judge this off the apprentice’s postcode. Same proportion of levy payment spend in England is the same proportion of paybill to employees in England.
Is your organisation going to be paying a levy? If so, have you started thinking about ways you will be able to use this for talent recruitment and upskilling existing staff?

7. EXAMPLES OF THE APPRENTICESHIP LEVY
PAYBILL – includes the 10% top up
POTENTIAL APPRENTICESHIP PROGRAMME
£20m paybill = £93,500 annual levy)
120 apprentices per year
£8m paybill = £27,500 annual levy)
36 apprentices per year
£5m -paybill = £11,000 annual levy)
14 apprentices per year
Break down the levy in more detail. Will also need to look at sector .

8. HOW WILL IT WORK? LEVY PROPOSALS AUGUST 2016
The levy payment process will operate on a monthly basis, alongside PAYE processes. Levy monthly amounts will accumulate in DAS throughout the year.
Monthly levy payments will go up or down according to employer payroll amount (fluctuations in staffing and seasonal employment)
Any unused allowance will be carried from one month to the next.
Funds will expire 24 months after they enter an employers Digital Apprenticeship Service account and be removed.
Employers will be able to register to set up an account on the Digital Apprenticeship Service from January There will be guidance to assist from SFA.
HMRC will publish Levy Guidance in December this year.

9. LEVY PAYMENTS PER SECTOR
Total number of employers
Number of employers paying the levy
Proportion of
employers paying the levy
Levy paid by sector
Accommodation and Food Service Activities
101,100
480
0.5%
£65m
Administrative and Support Service
109,250
1,730
1.6%
£135m
Arts, Entertainment and Recreation
30,290
390
1.3%
£35m
Construction
167,420
880
£50m
Education
28,760
2,590
9.0%
£385m
Financial and Insurance Activities
25,390
1,020
4.0%
£270m
Human Health and Social Work Activities
86,230
1,300
1.5%
£360m
Information and Communication
118,370
1,260
1.1%
£120m
Manufacturing
92,190
2,710
2.9%
£180m
Professional, Scientific and Technical
250,020
2,120
0.8%
£255m
Public Administration and Defence
4,020
420
10.4%
£115m
Real Estate Activities
34,280
440
£30m
Transportation and Storage
38,120
530
1.4%
Unknown
52,600
0.7%
£295m
Wholesale and Retail Trade; Repair
227,720
2,250
1.0%
£235m
Aggregated due to low sample size
42,600
330
£55m
Total
1,505,380
19,150
£2,675m

10. Apprenticeship Process Overview
Employers, lead providers and their contracted providers use the standard to agree what will be delivered – how off the job (OfTJ) training will occur, how assessment of progression will occur, who will deliver what and how. Does the employer want a qualification as part of the final outcome.
Employer and lead provider agree a price between them to meet the costs of training and end-point assessment for each apprenticeship, and any other added costs such as additional qualifications – what mapping needs to take place
Employer can specify which end assessment organisation they want the provider to use.
The Apprenticeship Agreement establishes a clear contract for all of the above. It includes the Payment Schedule – when the employer will pay the provider and/or make their own payments (non-levy paying employers).
A Statement of Commitment signed by all parties makes roles and responsibilities clear (employer, provider, parent – if U18 apprentice).
rules

11. Apprenticeship process
Written Agreements and Pricing -
Written Agreements – legal watertight document for employer and provider – make sure you are safe!
When will the employer make payments to providers – payment schedule needs to be clear, e.g. is there any need for initial payments to enable providers to commence delivery, if required. Does the employer need to pay for any extras?
What is your apprenticeship offer? Which apprenticeships you can deliver and the minimum amount you can deliver them for – simple pricing model your staff and the employer understand
Economy of scale – if employer wants you to deliver apprenticeships, how much discount can providers afford to offer – what and how many apprenticeships can the employer get for their levy?
When do providers walk away?

12. Employer Discussion Questions
Be the experts…
Internally, who will have responsibility for managing the levy system and funds…access, sign off, payments (super user approach)?
Are the HR/training and finance teams in dialogue re the levy and processes (invoicing, management of funds, users)?
Which roles are, or could be, suitable for apprenticeships?  This does not have to be new-entry staff only – training for promotion or progression does qualify. Employers save ££’s when they have progression planning in place.
Which employees are suitable for apprenticeships – minimising turnover of staff on apprenticeships maximises use of levy.
Are higher apprenticeships an opportunity?
How will end-assessment occur – what does the employer want? Is it in line with the standard assessment plan? Is there a qualification to add into the mix?

13. NEW APPRENTICESHIP PROCESS ARRANGEMENTS
Step one
Employer selects chosen provider from DAS/Levy system
Employer can see what you deliver and provider performance data.
Providers should be informed on any incentives employers may be able to claim and standards funding caps for those sectors they deliver in
Step two
Initial negotiations take place
Sensible for providers to have pricing structures already in place for apprenticeships you deliver
Will there be a prime/sub-contractor arrangement to manage?
Which EPA organisation?
Step three
Employer recruits apprentice
Provider checks learner eligibility and any other support needed.
Step four
Written Agreement – legal contract
Final negotiations take place – who delivers what (OfTJ learning should be minimum of 20%), along with financial agreement
Provider and employer sign written agreement and payment schedule.
Provider, employer and apprentice sign individual commitment statement.
Commitment statement, all parties must have signed copy. U18 apprentices – parent or guardian must also sign
The commitment statement must set out the planned content and schedule for training and end-point assessment. It must also set out what is expected and offered by the employer, lead provider (and any subcontractors) and the apprentice to achieve the apprenticeship.
Evidence pack –
the written agreement between the employer and the lead provider can be kept as part of the apprenticeship evidence pack in order to avoid duplication.
The provider’s own copy of the commitment statement between the employer, the apprentice and the lead provider must be kept as part of the written agreement.
If training is delivered by an employer, the evidence pack may also contain employment records held by the employer, such as application forms, learning and development plans and payroll systems. The majority of information will come from normal processes and be produced as part of the organisation’s business.
It may be in paper, electronic or a mixture of formats.
For employers and/or lead providers it could include enrolment forms, data-capture forms, induction checklists, initial assessments, training plans, confirmation letters to apprentices, self-declarations, attendance records, copies of certificates and result forms.
Step five
Provider creates apprentice evidence pack
single point of reference relating to training and end point assessment
Set up ILR registration – ensure cash contributions from employers are recorded on ILR to enable claim of Gov funding
ILR triggers payments to provider with non-levy employers. Provider must evidence all cash contributions from employer
Step six
End assessment
Provider pays any remaining incentives to employer
End assessment organisation claims certificate for learner
Provider must validate all employer incentives before payment

14. DIGITAL APPRENTICESHIP SERVICE
DAS will be ready in BETA form by year end (sits on .Gov server)
There will be a free text box to enable providers to ‘sell’ their offer and expertise to employers.
Potentially, also a Trip Advisor process for employers to feedback comments on provider performance.
Entry page has several options –
Financial Information
Provider Information
Planning tool
Looks much like a bank statement
Will show % of English funds available to spend.
In real terms, the cash will still flow to providers from the SFA.
Planning tool – funding calculator enable employer to plan and take into account employers with fluctuating payroll/seasonal staffing.
Employers will be able to view committed spending

15. CALCULATING LEVY AND SPEND
    

16. CALCULATING LEVY AND SPEND
        

17. CALCULATING LEVY AND SPEND
     

18. HOW WILL IT WORK FOR NON LEVY PAYERS?
PROPOSALS AUGUST 2016
Government will pay 90% of the costs of apprenticeship for non-levy paying employers. Employers will only have to contribute 10%.
Levy paying employers who have exhausted their levy funds, opportunity to co invest with the government at the same 1:9
SME’s with less than 50 employees will not pay anything towards costs for a apprenticeship. 100% funded by Government.
Further funding support and incentives for care leavers, and those with Education and Healthcare plans.
From 2018, employers will be able to transfer 10% of their levy funding to another employer with a digital account, e.g. an organisation in their supply chain.

19. KEY DATES SMEs Levy-payers
Dual running of SASE Frameworks and new Standards
2016
April ‘16 – End of NI contributions for apprentices under 25
April ‘17 – Levy Starts
Dual running of SASE Frameworks and new Standards but with maximum possible starts on the new Standards
2017
April ’17 – Digital Apprenticeship System (DAS) will be operational for levy-payers
April ‘17 – Single funding model for apprenticeships
August ‘17 – AGE grant finishes
Context timing
Gradual changeover from SASE to new standards
Difference between SMEs and levy-payers
2017 is a key year as new funding model will come into play and DAS will launch. This will begin to see a great change to the new standards.
SASE likely to fully replaced by new Standards
2020
2019/2020 – Digital Apprenticeship System (DAS) will fully operational for both SMEs and levy-payers

20. Employer Provider Guide
DfE have produced an Employer Provider Guide –
What employers can and cannot spend levy funds on
Ofsted Inspections
ILR Data returns
Annual monitoring and audit by SFA
Retaining evidence of learning, learner progress and performance data (achievement and outcomes data)

21. WHAT EMPLOYERS ARE TELLING US
ABOUT THE LEVY
NOT SURE
“I don’t understand the levy and am not sure what levy my business will be paying.”
“We are seeing our levy as an additional tax and have no plans to use it”
NOT INTERESTED
“We plan to spend our levy on specialist areas outside of our core business. We see this as the best ROI as it is training we couldn’t deliver ourselves.”
THINKING OUTSIDE
THE BOX
“We have no choice but to reduce investment in other areas of our workforce development. We will look to offset the extra costs by adapting training programmes for existing staff so they can be accredited as apprenticeships”
MAINTAINING CORE PROGRAMMES
Liz
How employers are reacting to and planning on spending the levy - anecdotal feedback from our largest employers
Two-thirds (65%) of employers claim to be opposed to or undecided about the Apprenticeship Levy according to a report from the CIPD carried out June it will force employer to reduce investment into other forms of training and development.
Overall lack of Information available for employers and only 36%
have calculated their annual levy payment
Some employers are suggesting that they may treat the levy as an additional tax; others are proposing to spend their levy on specialist areas outside of their core business
Those who have calculated the cost say “it will force them to reduce investment in other areas of workforce development” and almost a third of those will look to offset the extra costs by adapting training programmes for existing staff so they can be accredited as apprenticeships
SME’s will continue to work directly with providers in the same way receiving incentive payments from the SFA based on a new funding model still to be confirmed.
“Our paybill is under £3million so we won’t pay the levy. We are waiting to find out what co-investment might be required and what incentive payments will be available.”
NON-LEVY PAYERS

22. TIPS FOR DEVELOPING A QUALITY APPRENTICESHIP PROGRAMME
Understand the levy
Calculate your levy allowance and determine how it will be allocated in line with your business strategies.
Things to consider:
The value of your levy 
Current spend on training, and what is paid into the levy
Engage with finance and senior management teams to ensure they are aware and discuss how the funds will be allocated
Develop a People Plan
With your HR and Senior Management teams to align business goals in accordance with your workforce development programme.
Identify any skills gaps or recruitment opportunities within your business and determine if an apprenticeship is an appropriate solution.
Things to consider:
Refer to or develop a HR People Plan across the whole organisation
Check if current training provision meets future talent pipelines
Consider apprenticeships for future opportunities within the business

23. TIPS FOR DEVELOPING A QUALITY APPRENTICESHIP PROGRAMME
Review current training programmes and where occupations can be mapped to apprenticeships
Map new apprenticeship Standards to job roles to identify skills gaps, support progression and identify recruitment opportunities. Things to consider:
Alignment of any new progression opportunities against existing frameworks or new apprenticeship Standards.
Map and plan training against the apprenticeship Frameworks and Standards in order to maintain a seamless ‘Business As Usual’ approach.
Existing SASE Frameworks can also be considered as they will continue to be offered alongside the new Standards during the transitional period.
Decide which programmes to deliver
Things to consider:
Choose apprenticeship/s for delivery (using the levy)
Ensure enough funds are available as per the funding bands for each apprenticeship
Consider offering new vacancies as apprenticeship opportunities
Consider offering Level 3 Apprenticeships and above as a promotion route
Consider making Graduate Recruitment Programme a Higher Level Apprenticeship Programme

24. TIPS FOR DEVELOPING A QUALITY APPRENTICESHIP PROGRAMME
Decide how to deliver an apprenticeship programme
Determine which delivery method is best suited to your business. Things to consider:
Choice between becoming a registered provider, or select a provider or college from the RoATP
If partnering, ensure that the chosen provider or college has the capability and capacity to deliver.
If delivering across multiple regions, consider working with a national or several regional colleges / providers.
Determine what percentage of the apprenticeship, if any, will be delivered by a college or provider.
Determine end-point assessment delivery method and end assessment organisation.
Select registered and approved delivery providers via DAS.
Ensuring readiness to deliver
Consider their staff training and planning strategies when developing apprenticeships programmes within their businesses.
Things to consider:
Determine if staff require leadership and management coaching or training to effectively support and manage apprentices and assess knowledge and competency.
Implement a strategy for training internal staff, mentoring and coaching
Decide how to manage and monitor the apprenticeship programme.
Ensure internal systems, facilities and equipment are in place as per the requirements of the apprenticeship programme.

25. QUESTIONS