1. Apprenticeships
Petroc, Barnstaple: 23rd November 2016

2. Content Context to apprenticeship reforms The apprenticeship levy
Funding rules
The Digital Apprenticeship Service (DAS)
Milestones and next steps

3. Underpinned by apprenticeship levy and digital apprenticeship service
Context: Ambitious Government apprenticeship reforms
Standards to replace apprenticeship frameworks by 2020
New Institute for Apprenticeships
Legal protection to degrees
Apprenticeship target for public sector bodies
Secondary Class 1 NICs abolished
Individual apprenticeships provide good returns, but there is an insufficient number of apprenticeship opportunities to meet demand from individuals, and skills gaps remain in the economy.
Whilst the vast majority of apprenticeships provide high quality training, feedback from employers shows that this is not always the case. We need to continue to drive up the quality of apprenticeship training and ensure that anyone completing an apprenticeship is fully competent in their occupation.
We want to make apprenticeships as accessible as possible, to all people, from all backgrounds and the funding reforms are an important step in enabling this.
These reforms include:
Placing employers at the heart of designing new Apprenticeships Standards to replace apprenticeship frameworks by 2020
New Institute for Apprenticeships, led by employers to oversee standards and ensure quality and rigour
Apprenticeships given equal legal protection, similar to degrees
Apprenticeship target for public sector bodies – a duty for 2.3% of their workforce to be apprentices will grow opportunities
Secondary Class 1 National Insurance contributions abolished for apprentices under the age of 25 since April 2016
All this is to be underpinned by changes to how apprenticeships are paid for. The new apprenticeship levy will fund the expansion. The digital apprenticeship service will enable employers to directly manage their apprenticeship programmes and purchase training.
Underpinned by apprenticeship levy and digital apprenticeship service

4. The apprenticeship levy and who pays it?
Starts on 6 April 2017, at a rate of 0.5% of UK pay bill, paid through PAYE
Applies to all UK employers in all sectors
£15,000 offset allowance is not a cash payment
Less than 2.0% of employers will pay the levy

5. What about non levy payers? Co-Investment
There are two types of employers who will be benefit from government support towards the cost of their apprenticeships training:
Employers who haven’t paid the levy and want to purchase apprenticeship training from a provider
A levy-paying employer who with insufficient funds in their digital account to pay for the cost of training and assessment they want to purchase
The government will pay 90% of the costs of training and assessment.
The employer will be responsible for paying 10% of the costs.

6. Accessing levy funds to spend on training
Levy funds will be available through a new digital service on gov.uk
First funds appear in account in late May 2017
How funds in the account will be calculated
If 100% of UK pay bill is in England
100% of levy payment in digital account
If 80% of UK pay bill is in England
80% of levy payment in digital account
10% government top up to monthly funds entering an account

7. Purchasing training – both groups
New funding system comes into effect on 1 May 2017
Apprenticeships started before 1 May will be funded through to completion according to the existing rules
The cost will be spread over the lifetime of the apprenticeship
We will hold back 20% of the total cost, to be paid on completion of the apprenticeship
Levied employers buying training from May 2017
Can commit to apprenticeship starts from the beginning of May
Funds will automatically leave the digital account on a monthly basis
The new funding system comes into effect on 1 May 2017, because May is the first month that levy paying employers will declare a levy payment to HMRC.
All apprenticeships started before 1 May will be funded through to completion according to the existing funding rules. Any employer contribution towards training commenced before 1 May will also continue at the current rate.
The cost of the apprenticeship will spread over the lifetime of the apprenticeship and we will hold back 20% of the total cost, this will be for the end point assessment that will be paid on completion of the apprenticeship.
Levied employers will be able use their digital account to commit to apprenticeship starts from the beginning of May and use their levy funds after selecting a training provider and apprenticeship programme.
Once an employer has committed to an apprenticeship funds will automatically leave the employer’s digital account on a monthly basis.
By committing to training via the digital account an employer will be entering into a contractual agreement with the training provider.
Information tools within the digital account will help employers forecast funds that are likely to accumulate in their account over time. This will help employers to manage their cash flow and digital funds.
For non-levied paying employers we will continue to use the existing method of funding directly to training providers. So these employers will not have to buy training, or set up a digital account in May 2017.
Non-levied employers will move onto the digital system at a later date.
Non-levied employers buying training from May 2017
Continue to make payments direct to providers
Move onto the digital system at a later date

8. What can funds be used for?
Digital funds and government funding can be used for:
Digital funds and government funding can not be used for
apprenticeship training and assessment
against an approved framework or standard
with an approved training provider and assessment organisation
up to the funding band maximum for that apprenticeship
wages
travel and subsistence costs
managerial costs
traineeships
work placement programmes
the costs of setting up an apprenticeship programme

9. How the funding system will work
Government
Training Provider
Paid by SFA and balance by employer
HMRC collect levy (PAYE)
Employs apprentice and commits to training
Provides training to apprentice
Timely data on training
Employer views funds in digital account to spend in England
Check training is complete
If funding unlocked: pay provider
Registers with SFA
Employer and Provider Identity Assurance
Pass data on levy payments from HMRC to DfE
Unused funds expire after 24 months
Receives training for apprentice
Payments to providers taken from digital account
Commits to provide apprenticeship training
10% Top up
Levy paying employer
Employs apprentice and commits to training
Receives training for apprentice
Employer pays for proportion of cost direct to training provider
SFA pays govt proportion of costs to the training provider
Non-levIED employer
Provides info via ILR to SFA that training has taken place & that employer has made contribution

10. Apprenticeship funding in England from May 2017: Funding rules

11. Funding rules - the funding bands
Number
Band limit 1
£1,500 2
£2,000 3
£2,500 4
£3,000 5
£3,500 6
£4,000 7
£5,000 8
£6,000 9
£9,000 10
£12,000 11
£15,000 12
£18,000 13
£21,000 14
£24,000 15
£27,000
Every apprenticeship will be placed in a funding band.
The upper limit of each funding band will cap the maximum:
amount of digital funds an employer who pays the levy can use towards an individual apprenticeship.
that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds
Employers will be able to negotiate the best price for the training they require
Funding bands:
Online calculator:

12. Expiry of Digital Funds
Apprenticeships - Funding rules
Cross-border funding
Applying a single test for funding through the English system: based on whether the apprentice’s main place of employment is England.
‘Workplace’ is where the apprentice is expected to spend the majority of their time during their apprenticeship.
Expiry of Digital Funds
Extended to 24 Months – helping employers to prepare for the new system and adapt training programmes
Prior qualifications
Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold.
From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills
Transferring funding
During 2018 we will introduce means for employers to transfer up to 10% of the levy funds to another employer with a digital account, or to an ATA.
New employer steering group to design this system so that it meets their needs

13. Apprenticeships 2017 - additional support
16-18 year olds
Government will pay £1,000 to employers, and a further £1,000 to training providers if they train a year old apprentice plus extra government funding to provide a transitional 20% uplift for providers training year olds on a framework (outside of levy a/c).
Smaller sized employers
Employers with fewer than 50 employees will have 100% of the training and assessment costs covered when training a year old (or year old formerly in care or has a Local Authority Education, Health and Care plan
English and Maths training
To meet minimum standards of English and maths we will pay training providers £471 for each of these qualifications (Level 1 and 2)
Disadvantaged young people
Government will pay £1,000 to employers, and a further £1,000 to training providers if they train year olds leaving care or who have a Local Authority Education and Healthcare plan.
Additional support in areas of disadvantage
Additional learning support
We will pay training providers up to £150 a month to support these learners, plus additional costs based on evidenced need

14. The Digital Apprenticeship Service (DAS)
NOTE
Employers who don’t pay the levy will not need to use the digital apprenticeship service to pay for apprenticeship training and assessment until at least When we ask them to start using the digital apprenticeship service to pay for apprenticeship training, we will help them to prepare.

15. Estimate my apprenticeship funding will allow employers to calculate whether they will pay the apprenticeship levy or not, and how much an employer will have available to spend on apprenticeships. It will also show how much the government will contribute towards the cost of training.
To use this tool employers will need to know their organisations annual UK payroll as it will be needed on the next page. It will also be useful to know the percentage of the workforce that live in England and the type of apprenticeships they will need.
Once an employer is ready they can click start to continue.

16. Find apps training
Find apprenticeship training is an easy to use online tool that allows employers to find the right type of apprenticeship training and training providers for their business.
Once on the website on GOV.UK employers can begin the search by clicking start.

17. Link to: Find Apprenticeship Training
Individual apprenticeships provide good returns, but there is an insufficient number of apprenticeship opportunities to meet demand from individuals, and skills gaps remain in the economy.
Whilst the vast majority of apprenticeships provide high quality training, feedback from employers shows that this is not always the case. We need to continue to drive up the quality of apprenticeship training and ensure that anyone completing an apprenticeship is fully competent in their occupation.
We want to make apprenticeships as accessible as possible, to all people, from all backgrounds and the funding reforms are an important step in enabling this.
These reforms include:
Placing employers at the heart of designing new Apprenticeships Standards to replace apprenticeship frameworks by 2020
New Institute for Apprenticeships, led by employers to oversee standards and ensure quality and rigour
Apprenticeships given equal legal protection, similar to degrees
Apprenticeship target for public sector bodies – a duty for 2.3% of their workforce to be apprentices will grow opportunities
Secondary Class 1 National Insurance contributions abolished for apprentices under the age of 25 since April 2016
All this is to be underpinned by changes to how apprenticeships are paid for. The new apprenticeship levy will fund the expansion. The digital apprenticeship service will enable employers to directly manage their apprenticeship programmes and purchase training.

18. Recruit an apprentice has replaced the older apprenticeship vacancies (AV) website which some employers will be familiar with.
This service is for registered training providers (including large employers with direct grant funding) to post vacancies and manage applications for apprenticeships and traineeships.
Once an employer has selected their training provider as shown previously, the provider will be able to use recruit an apprentice to advertise the vacancy for the employer.
This part of the service is live, along with the candidate search and application service called find an apprenticeship. Employers will be able to advertise and manage their own vacancies at a later date.
There are further resources to support employers with their apprenticeship recruitment on GOV.UK
There would be no need to use this service if you have already identified your apprentice or are putting an existing staff member through an apprenticeship.

19. Funding
Manage the funding for your apprenticeship(s): Accessing your digital account
Individual apprenticeships provide good returns, but there is an insufficient number of apprenticeship opportunities to meet demand from individuals, and skills gaps remain in the economy.
Whilst the vast majority of apprenticeships provide high quality training, feedback from employers shows that this is not always the case. We need to continue to drive up the quality of apprenticeship training and ensure that anyone completing an apprenticeship is fully competent in their occupation.
We want to make apprenticeships as accessible as possible, to all people, from all backgrounds and the funding reforms are an important step in enabling this.
These reforms include:
Placing employers at the heart of designing new Apprenticeships Standards to replace apprenticeship frameworks by 2020
New Institute for Apprenticeships, led by employers to oversee standards and ensure quality and rigour
Apprenticeships given equal legal protection, similar to degrees
Apprenticeship target for public sector bodies – a duty for 2.3% of their workforce to be apprentices will grow opportunities
Secondary Class 1 National Insurance contributions abolished for apprentices under the age of 25 since April 2016
All this is to be underpinned by changes to how apprenticeships are paid for. The new apprenticeship levy will fund the expansion. The digital apprenticeship service will enable employers to directly manage their apprenticeship programmes and purchase training.

20. Government Gateway ID Government gateway ID Link PAYE schemes
Plan and map
When an employer first logs onto the system they will need to create an account.
As the levy is linked to an employers HMRC payroll declarations they will need their businesses Government Gateway ID to set up an account.
It is likely that the business’s payroll team have access to the government gateway ID as it is used when submitting PAYE information to HMRC.
It is vitally important to get this right so we encourage everyone to have their gateway ID ready before starting the process. Further support on the Government Gateway ID is available at gateway.gov.uk
The Gateway ID is used to identify those PAYE schemes that are connected and relate to the employer. An employer can then select which PAYE scheme or schemes they want to attach and link to the digital account.
It’s advisable that employers identify all of their PAYE schemes before they start this process and map out which schemes they are planning to link to which account.
HMRC have launched a technical consultation around the calculation, reporting and payments of the levy. This is available on .GOV.UK and closes on the 14 November.
We cannot advise on tax related issues and employers must go to HMRC for support and advice. We would recommend that all levy paying employers read the proposals and submit comments if required.

22. Funding slide

26. 24

28. From the home screen the apprentices section can be accessed.
All the apprentice information is clearly displayed in one place.
Employers can
Add a new apprentice
Review and approve cohorts
And view individuals and their details apprenticeship details
Within the ‘view apprentices on programme’ link it is possible to transfer, pause or stop the apprenticeship as well as being able to see information on the individual’s apprenticeship journey; their provider, standard being studied, start dates, and estimated completion dates.
I will now show you how to add a new cohort of apprentices to the system.

41. Key milestones - dates subject to change
2016:
September
Feedback received to the published apprenticeship funding proposals
October
Publish funding bands that apply in the new system
Full set of technical rules that underpin the funding system
Calculation for English proportion
Pilot testing with employers
Register of Apprenticeship Training Provider open
November
December
Further employer guidance from HMRC on how to calculate and pay the apprenticeship levy
The process has been in development for some time and we have recently passed some key milestones with many more to come.
In August we published further proposals on the detailed funding model that would apply to all apprenticeships from May Feedback to the proposals closed on 5 September and have been incorporated into October announcements.
In October 2016 we published the final funding bands that will apply in the new system from the 1 May As well as the final, full set of technical rules that underpin the funding system.
The new Register of Apprenticeship Training Providers has just launched and is open to new applications – including employer providers
We have also confirmed how the proportion of pay bill, that is paid to employees living in England will be calculated.
October is also when we will be piloting the service with employers and providers. Giving us vital feedback on the full service before it launches in 2017.
In December HMRC will provide further guidance to employers on how to calculate and pay the apprenticeship levy.

42. Key milestones - dates subject to change
2017:
January
Employers to register
February
March
National Apprenticeship Week (6 to 10 March)
April
Levy paid
May
Service live
Make levy commitments
To 2020
All employers to use the service
In early 2017 we will enter the last stages of development of the digital apprenticeship service and it will be available on .gov.uk for employers to register and create an account
In March 10th National Apprenticeship Week will be taking place from 6 to 10 March.
From April 2017 onwards, the apprenticeship levy will be paid within your HMRC calculations
In May 2017 you will be able to access the live system and create contracts and commitments with training providers using funds in your digital account
By 2020, all employers will be able to use the digital apprenticeship service to pay for training and assessment for apprenticeships.
Please note that all dates are provisional and are subject the change.

43. Apprenticeship changes on GOV.UK
Next steps: Updates
Search for
Apprenticeship changes on GOV.UK
Search the internet for the
Estimate my apprenticeship spending tool
For the latest and most up to date information search for Apprenticeship Changes on GOV.UK
To help with you planning search the internet for the Estimate my apprenticeship spending tool.
Feedback on HMRC’s draft legislation by searching for “Regulations for the calculation, payment and recovery of the Apprenticeship Levy”. This consultation closes on 14 November 2016.