Apprenticeships
What is the new levy:
•The apprenticeship levy comes into effect from April 2017 and forms part of a broader programme of governmental reforms.
•The government is committed to increasing the quantity and quality of apprenticeships and aims to reach 3 million apprenticeship starts in 2020.
•An Institute for Apprenticeships is being set up to regulate the quality of apprenticeships and will be an independent, employer-led body.
•The existing qualification frameworks are being phased out and replaced by apprenticeship standards. There are currently over 150 Trailblazer groups, made up of employers, industry leaders and learning institutions, developing over 375 standards, right up to degree and masters levels.
•Over 40% of the standards developed so far are higher or degree level and apprenticeships will be given equal legal protection to degrees.
•Public sector bodies will be targeted to have 2.3% of their workforce made up of apprentices. The only exception to this is schools with less than 250 employees if they are a stand alone establishment. Grant maintained schools and MATs will be assessed as part of the entire organisation.
What can levy funds be used for:
•A step change in the scale and quality of the apprenticeship programme also requires a step change in funding.
•Any UK employer in any sector with a pay bill of more than £3million per year is liable to pay the levy.
•The levy will be 0.5% of the pay bill and calculated, reported and paid to HMRC, through the PAYE process.
•Maintained schools are classed as employees of the Local Authority and so the levy will be taken as a tax deduction from the school payroll costs.
•For Multi Academy Trusts, the majority will have a combined pay roll of £3m and will therefore pay the 0.5% levy in their own right.
•The levy will be paid monthly and will enter an account on the Digital Apprenticeship Service (DAS), to which government will add a further 10% top up each month, effectively enabling employers to get out more than they pay in. The DAS will be used to find and procure training, manage levy payments and pay for training providers and end-point assessments. Maintained schools will be managed as part of the wider NCC DAS account but MATs that pay the levy in their own right will have their own digital account.
•Funds can be used to pay for apprenticeship training and assessment with a Skills Funding Agency approved training provider and assessment organisation. Each apprenticeship qualification standard will fall within a funding band and it is up to us as employers to negotiate a price with providers.
•Levy payers can pay 100% of the training and assessment costs from their DAS. If they negotiate a price over the funding band maximum they will not be able to pay the additional cost from their levy funds.
•Small Multi Academy Trusts or single academy schools who do not pay the levy will need to contribute 10% of the cost of apprenticeship training and assessment and the government will pay 90%, again up to the funding band maximum. Government are calling this ‘co-investment’.
•Funds cannot be used for wages, statutory licences to practise, travel and subsidiary costs, managerial costs, traineeships, work placement programmes or the costs of setting up an apprenticeship programme.
•It’s worth noting that any unspent funds in the DAS will expire after 24 months and will be redirected by the government. SO - USE IT OR LOSE IT
•Frameworks - which are the current qualifications for apprenticeships - are being replaced by Standards.
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Existing Apprenticeships:
•Frameworks can be very lengthy and cumbersome, where Standards are slimline and intended to be a ‘shop window’ to the Key Skills, Behaviours and Competencies required of the vocation.
•At the moment, like most things apprenticeship related, we have mass confusion as Frameworks and some Standards are running in parallel.
Standards in Development:
•There are many Standards (new qualification) in development.
•It is worth considering that there are upcoming Standards that Schools may wish to use, of particular interest is the Level 3 TA route, which will be replacing the Level 2 and 3 framework, expected in Sept 17.
Apprenticeship to Teaching:
•A most interesting development is the introduction of an Apprenticeship Route to teaching.
•The government are keen to introduce an other route to QTS and have engaged a group in Surrey, South Farnham Education Trust, to create a TRAILBLAZER group to develop this new qualification which will lead to QTS.
•An Expression of Interest has been submitted to the Secretary of State, at time of writing the decision had been delayed, but it is expected to be approved.
What do we know?
•Will be a Higher Degree Level Apprenticeship, which have been given same legal status as a University degree.
•Whole standard based on Teachers Standards, and expectation is the course content will take account of the new ITT core content report of published in July this year.
•Anticipated to be very similar to School Direct route- 80% of time in school, 20% academic study.
•The two Nottingham Universities are very keen to deliver this apprenticeship.
•This route should appeal to a new demographic, perhaps a high performing TA, or a career changer who cannot commit to HE fees and a year of earning no salary as apprentices will be paid throughout the course.
What don’t we know
•Entry level requirements
•Definite timescales- but anticipated to be approved April 2018
•Detail on who will deliver the training, eg TSAs or HEIs and who will be the accrediting body
Apprenticeship costs:
Remembering that the levy cannot be used to pay for wages, what would an apprentice cost you?
•Apprentices employed in City Council schools must be employed on NCC Terms and Conditions and paid National Minimum Wage for their age, NOT the Apprenticeship Wage. Apprentices are employed on a Fixed Term Contract which must be for a minimum of 1 year and may be significantly longer depending on the qualification they are undertaking.
•Non maintained schools are able to employ apprentices on the National Apprenticeship Wage of £3.40 per hour but need to note that if an apprentice is over 19 and in a 2nd or later year of their apprenticeship they are entitled to be paid the National Minimum Wage for their age.
•The cost of an apprenticeship standard is now fixed, irrespective of the age of the apprentice, meaning that anybody can potentially undertake apprenticeship training. This means that you can also use the apprenticeship levy funds to develop your existing staff by encouraging them to undertake an apprenticeship – this would not create any additional salary costs for you, although you would need to allow them the time required to complete their studies (at least 20% of time as off the job training). In addition, it will no longer matter if an apprentice is already qualified to an equivalent level, providing the qualification they are undertaking provides them with a significantly different skill set.
Your next steps:
•There are a number of things schools need to do in readiness for these reforms. The majority of schools will be paying an amount equal to 0.5% of the pay bill in to the levy and need to factor this into their budget calculations. You could effectively just write this off as a tax, however we believe that it does present an opportunity to bring new talent in to your organisations and develop your existing colleagues.
•If you are a maintained school that doesn’t buy EMSS you need to instruct your payroll provider of the rates shown on the previous slide.
•To that end, now is a good time to review your existing staffing structure and their development needs. Think about what your organisation will look like in the next few years and what succession planning you need to put in to place. Have a look at the qualification standards that are currently available and those in development and see how you can maximise your usage of the levy.
•You may have already been approached by many other organisations wanting to discuss the levy and with offers of how they can manage it for you. BUT be aware that if you’re a maintained school you MUST pay the rates, and employ on the Council’s T&C. It is a very competitive market for learning providers and training agencies at the moment and some may take advantage of the complexities around the levy and the knowledge that schools are time poor.
•Nottingham City Council run a well established and multiple award winning scheme. If you are a maintained school the City Council will manage the digital apprenticeship service, the DAS, on your behalf as part of our combined account. If you are part of a Multi Academy Trust with a pay bill of over £3million you will have your own DAS account. If you are a small MAT or single academy school and do not pay the levy you won’t need to use it to pay for apprenticeship training and assessment until at least 2018. When you do start NCC can help you to prepare. But from May NCC can help you to choose the training you’d like your apprentices to receive, an approved training provider and an assessment organisation using the registers available on the DAS.
•Whichever scenario you fall under NCC can provide a service to help you bring apprentices into your organisation – from advert and shortlisting, to assessment centres and interviews right up to pre-employment checks, contracts and beyond.
Find out more:
The levy and how it will work:
New apprenticeship standards: