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Apprenticeship Funding

Content

Who is this presentation for? Context to apprenticeship reforms What is the apprenticeship levy? Paying and using the levy What you can do now and next steps

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…and employers are investing less in training

Who is this presentation for?

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From April 2017 the way apprenticeships are funded is changing as part of a series of wider reforms to the apprenticeship system in England. Employers with a pay bill of more than £3m will be required to pay an apprenticeship levy. This will be paid to HMRC through the PAYE system. This presentation is designed to help schools and academies as employers Around the world, apprenticeships have long been recognised as a crucial way to develop the skills wanted by employers. That is why the Government is working with employers to increase the quality and quantity of apprenticeships in England. The Government’s commitment to 3 million apprenticeship starts by 2020 is a shared priority and all Government Departments are supporting an expansion of apprenticeship opportunities.

…and employers are investing less in training

Action is needed to address current economic trends

50,000 100,000 150,000 200,000 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Number of employees who worked fewer hours than usual because they attended a training course away from their workplace

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That’s why the government is committed to significantly increasing the quantity and quality of apprenticeships in England and achieving 3 million starts by 2020. UK productivity lags behind other developed economies and employers are investing less in training. Meanwhile relative social mobility has stagnated or declined over recent decades.

Apprenticeships contribute to addressing these challenges

Apprenticeships provide good economic returns, but there are not enough of them to meet demand

• r fill skills gaps in the economy. We also need to continue to drive up the quality of apprenticeship

training and ensure that anyone completing an apprenticeship is fully competent in their occupation. To support this government is changing the way apprenticeship are funded from April 2017

…and employers are investing less in training

What is an apprenticeship

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Apprenticeships combine practical training in a job with study. Apprenticeships are available at all levels from intermediate (level 2) to degree (level 6 & 7). There are rules governing what an apprenticeship is. The main ones are:

• the apprentice must be employed in a real job;
• they may be an existing employee or a new hire. They can be full or part time

employees.

• the apprentice must work towards achieving an approved apprenticeship

standard or apprenticeship framework

• the apprenticeship training must last at least 12 months
• the apprentice must spend at least 20% of their time on off-the-job training
• They must be paid the relevant national minimum wage

Employing an apprentice is very simple. The National Apprenticeship Service can provide all the information you need to know in order to employ an apprentice

Types of apprenticeship

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There are currently two types of apprenticeship, new apprenticeship standards and the older style apprenticeship frameworks. Apprenticeship standards Apprenticeship standards are developed by employer groups known as ‘Trailblazers’. Standards show the core knowledge, skills and behaviours need to be fully competent in a well-recognised occupation. Each apprenticeship standard also has an assessment plan produced by the ‘Trailblazers’ Apprenticeship frameworks Apprenticeship frameworks are the older style of apprenticeship and are used by colleges, employers and training providers to make sure that all apprenticeship programmes are delivered consistently and to national standards Apprenticeship standards will replace all frameworks by 2020

Apprenticeship funding in England from May 2017: How the funding changes, including the levy, work

Starts on 6 April 2017, at a rate of 0.5% of pay bill, paid through PAYE Applies to all UK employers in all sectors, including education £15,000 allowance is not a cash payment

What is the apprenticeship levy and who pays it?

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Paying the levy

• Employers pay their levy to HMRC, through the PAYE process
• Single employers with multiple PAYE schemes will only have one allowance.
• Connected employers share one allowance
• Employer of 250 employees, each

with a gross salary of £20,000.

• Pay bill: 250 x £20,000 = £5,000,000
• Levy sum: 0.5% x £5,000,000 =

£25,000

• Allowance: £25,000 - £15,000 =

£10,000 annual levy payment

• Employer of 100 employees, each

with a gross salary of £20,000.

• Pay bill: 100 x £20,000 = £2,000,000
• Levy sum: 0.5% x £2,000,000 =

£10,000

• Allowance: £10,000 - £15,000 =

£0 annual levy payment LEVIED EMPLOYER NON-LEVIED EMPLOYER

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Paying the levy - What this means for schools

The schools sector has a wide variety of arrangements in place, but there are no exceptions for apprenticeship levy liability. However, the type of school affects who is considered to be the employer for the purposes of the levy, and so who actually accrues the levy liability varies between set-ups. Each school or local authority should assess themselves for liability – the onus is on the employer to ensure that they comply with the legal requirements set out in the Finance Act. The following information does not constitute tax advice and individual schools and local authorities should seek appropriate professional advice to confirm their individual circumstances.

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Paying the levy - What this means for schools

The different set-ups of schools, means that there are likely to be differences in approach to paying the levy. The models below assume that the payroll and relationship between “parent” organisations (local authorities or MATs) and ‘child

• rganisations’ (e.g. community schools or academies in a MAT) are typical.

Schools where the local authority is the employer Where a school is a community school maintained by the local authority, the local authority is generally the employer. It is the LA who has the responsibility to pay ‘employer’ Class 1 secondary National Insurance contributions (NICs) on the earnings of the school staff, and so these earnings will be considered as part of the LA’s pay bill for levy liability calculation. Here the LA gets the £15,000 allowance. This is also the likely model where the school is Voluntary Controlled

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Paying the levy - What this means for schools

Schools where the local authority is not the employer Standalone academies. With an academy, the trust of the academy is generally the employer with the responsibility to pay Class 1 secondary NICs. They will therefore accrue levy liability based on the pay bill of the academy. They will have one £15,000 allowance. Academies that are part of multi-academy trusts. Multi-academy trusts (MATs) encompass multiple academies. In a MAT, it is generally the MAT itself that is the employer of the staff at any academies that are encompassed by it. This means that it is the MAT that accrues the levy liability based on the pay bill of all the academies, and gets one £15,000 allowance to offset against its liability. Foundation schools and Voluntary Aided Schools. Foundation schools and Voluntary Aided Schools generally employ their staff in the same way as academies, i.e. the governing body is considered to be the employer for the purposes of Class 1 secondary NICs. Therefore they will accrue and pay levy liability based on their own pay bill. They will have one £15,000 allowance

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• 10% government top up to monthly funds entering an account

Accessing levy funds to spend on training

• Levy funds will be available through a new apprenticeship

service on gov.uk

• First funds appear in apprenticeship service account in late May

2017 If 100% of pay bill is in England 100% of levy payment in account If 80% of pay bill is in England 80% of levy payment in account How funds in the account will be calculated

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Accessing levy funding - What this means for schools

Once the body that is the employer has declared the levy to HMRC, it will be able to access funding for apprenticeships through a new apprenticeship service account.

• When they have registered, the employer needs to verify their PAYE scheme/s and link them to their

apprenticeship service account.

• If they have more than one PAYE scheme, they can link them together if they wish, or will be able to use more

than one account if they would like to keep their schemes separate, e.g. if schools are on different PAYE schemes from other parts of an employer.

• It is only possible to have more than one apprenticeship service account if there is more than one PAYE scheme

Schools where the local authority is the employer As the school does not own the PAYE scheme the employees it administers are on, the local authority that owns the scheme will have control of the funds. The school should talk to the scheme owner about accessing the funds. Schools where the local authority is not the employer If a school does not own the PAYE scheme the employees it administers are on the organisation that owns the scheme, such as the Multi Academy Trust, will have control of the funds. The school should talk to the scheme owner about accessing the funds.

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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: 1. Employers who haven’t paid the levy and want to purchase apprenticeship training from a provider 2. A levy-paying employer who with insufficient funds in their 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.

Government 90% Employer 10%

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Co-investment - What this means for schools

Schools where the local authority is the employer LAs are likely to be above the threshold for paying the levy. This means that they are able to access co-investment if they have insufficient funds in their

apprenticeship service account to pay for the cost of training and assessment they want to purchase

Schools where the local authority is not the employer

Individual schools, which are not part of an organisation which pays the levy, will be able to access co-investment to pay for apprenticeship training. Schools which are part of an organisation that pays the levy are able to access co-

investment if the organisation has insufficient funds in their apprenticeship service

account to pay for the cost of training and assessment they want to purchase

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Purchasing training – both groups

Levied employers buying training from May 2017

• Can commit to apprenticeship starts from the beginning of May
• Funds will automatically leave the account on a monthly basis
• 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. Non-levied employers buying training from May 2017

• Continue to make payments direct to providers
• Move onto the system at a later date

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

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Who provides the training

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You can only spend the funds in your account or access government support for apprenticeship training delivered by an approved training provider. From May 2017, levied employers will be able to choose a provider from a new register, the register of apprenticeship training providers (RoATP). The register will encourage diversity and competition in the provider market, supporting quality and employer choice Employers wishing to become training providers We recognise that employers can be extremely successful training providers and we want to encourage those who want to take this route to deliver high-quality

• apprenticeships. Employers can register as either a main provider, who can

provide training on the open market, or as an employer provider if they only want to train their own staff.

What can funds be used for?

funds and government funding can be used for: 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

• rganisation
• 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

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Apprenticeships for schools

A consortium of schools are developing the TA apprenticeship, led by Hughenden Primary in Buckinghamshire. Officials are working with the group developing the TA apprenticeship to help ensure that it reflects the best available evidence and practice around effective use of TAs. The group are currently developing an apprenticeship Standard, to be followed by assessment criteria for the new apprenticeship, which they aim to have in place by the end of 2017 20 Early work on developing a Teacher apprenticeship standard is also underway, led by a group of schools coordinated by the Teaching Schools Council. There is not yet a firm timescale for the introduction of a teacher apprenticeship, however the apprenticeship has been approved in principle and the group will begin work in early 2017 to develop the standard. Decisions on how the new apprenticeship will sit alongside existing routes into teaching will be subject to further discussion with the sector as the standard is developed. It is clear, though, that teaching will remain a graduate profession, with the new route replicating the same high standards for entry and completion that are already required of all Initial Teacher Training programmes Work is also underway to develop an apprenticeship standard for School Business Directors. A group of over 40 employers which is led by Keswick School and supported by the National Association of School Business Management (NASBM) have consulted widely on the development of the apprenticeship standard. They have received a high level of support from the sector and the apprenticeship is being developed with the intention of being at degree level. The group is working with employers and Higher education institutions to develop the programme content and the apprenticeships end point assessment. You can find more information on apprenticeships available here: https://www.gov.uk/topic/further-education-skills/apprenticeships

Apprenticeships for schools – other roles

21 Business and Administration Catering and Hospitality Construction Digital Legal, Accounting and Finance Childcare and Education Creative and Design Health and Science

Schools employ staff in a wide range of functions, many of which may be suitable for using apprenticeships to support training and development. The Government’s Technical Education Reforms structure apprenticeships into 15 routes, grouped by occupations with similar knowledge, skills and behaviour requirements. In particular, apprenticeships for occupations in schools will fall into the routes below.

Business and Administration

22 Technical Premises and infrastructure

Occupation Apprenticeship standard Apprenticeship framework

(all ready for use)

Job role Business and administration

School Business Director – standard in development Business and Professional Administration School Business Director Chartered Manager – fully approved for delivery Leadership and management

• Finance Director
• School Business

Manager

• Learning Manager
• Office Manager

Business Administrator – standard approved; assessment plan in development Business administration - administration

• Administrator/Clerk
• Personal Assistant
• School Secretary

Business analyst - standard in development

• Data manager
• Data analyst

Customer service practitioner – fully approved for delivery Customer service Receptionist

23 Technical Premises and infrastructure

Catering and Hospitality; Construction; Digital Occupation Apprenticeship standard Apprenticeship framework Job roles Catering and hospitality

Cleaning and Support Services Operative – standard in development

• Cleaner

Senior chef production cooking – fully approved for delivery

• Cook

Construction

Facilities Management Supervisor – standard approved Facilities services Caretaker Head of Facilities Management – standard in development Facilities management Premises manager

Digital

IT Support – standard in development IT, Software, Web and Telecoms professional ICT Technician Digital and Technology solutions professional – fully approved for delivery IT, Software, Web and Telecoms professional ICT Network Manager

24 Technical Premises and infrastructure

Legal, Accounting & Finance; Health & Science

Occupation Apprenticeship standard Apprenticeship framework Job roles Legal, Accounting and Finance

Assistant Accountant – fully approved for delivery Accounting Finance officer Small Business Financial Administrator – standard in development Accounting Finance officer Payroll Administrator – standard approved; assessment plan in development Accounting Finance officer

Health and Science

Laboratory Technician-fully approved for delivery Laboratory and Science Technicians – education science Science Technician Nurse – standard in development _ Nurse

Childcare and Education

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Occupation Apprenticeship standard Apprenticeship framework Job role Childcare and education

Assistant early years practitioner - standard in development Nursery

• fficer/Assistant

Senior early years practitioner – standard in development Early years educator

Teaching & Learning

Teaching Assistant – standard in development Supporting teaching & learning in schools Teaching assistant Supporting teaching & learning in physical education and school sport School sports instructor Teacher – standard in development Teacher

To find out the latest information about apprenticeship standards not yet fully ready for delivery, email: apprenticeship.trailblazers@bis.gsi.gov.uk

Creating new apprenticeships

There will be occupations in schools that do not currently have an apprenticeship available or in development. If you are interested in working with other employers in the sector to identify these occupations, and bid to create new apprenticeship standards to cover them, you can read more about the process in our guidance for ‘Trailblazer’ employers: https://www.gov.uk/government/publications/future-of-apprenticeships-in-england-guidance- for-trailblazers Bear in mind that not every individual role in a school will be suitable for its own apprenticeship standard- as each standard must be at a sufficiently high occupational level to allow the apprentice to develop a strong set of transferable skills. New standards must also meet other criteria set out in the Guidance for Trailblazers to be approved for development. If you have any questions, email us at apprenticeship.trailblazers@bis.gsi.gov.uk for further advice on creating a new apprenticeship standard.

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Apprenticeship funding in England from May 2017: Funding rules

Funding bands

Every apprenticeship will be placed in a funding band The upper limit of each funding band will cap the maximum:

• amount of 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 Employers can negotiate the best price for the training they require

• If employers want to spend more than the funding

band limit, using their own money, then they will be free to do that.

• Funding bands do not have a lower limit.

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 28

Funding limits– how they work

• Example funding band limit = £6,000
• Price you negotiate with your training provider =

£5,000

• The cost is within the funding band limit
• Example funding band limit = £6,000
• Price you negotiate with your training provider =

£7,500

• The cost is above the funding band limit

WITHIN THE FUNDING BAND LIMIT OVER THE FUNDING BAND LIMIT

£5,000 will be deducted from your account over the life of the apprenticeship.

With enough funding in your account Without enough funding in your account

If you have £0 in your account we will pay 90% (£4,500) and you will need to pay 10% (£500). If you have funds available, these will be used first, and then we will pay 90% of the remaining costs, and you will pay 10%. £6,000 will be deducted from your account over the life of the apprenticeship. You will be responsible for paying £1,500. This payment can’t be made from your account

With enough funding in your account Without enough funding in your account

If you have £0 in your account we will pay 90% (£5,400) and you will need to pay 10% (£600). This is the maximum payable within the limit of the band. You will also be responsible for paying the additional £1,500. This payment can’t be made from your account

Funding rules and additional support

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. Transferring funding During 2018 we will introduce means for employers to transfer up to 10% of the levy funds to another employer with a account, or to an ATA 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 Additional support A range of additional support is available for younger and disadvantaged learners, and smaller employers

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Apprenticeship funding in England from May 2017: Supporting the reforms

The Public Sector Apprenticeship Target

In order to achieve 3 million starts the public sector needs to improve from its current position

• f delivering comparatively fewer apprenticeships than the private sector. As such we are

establishing a target for public sector bodies with more than 250 employees in England to employ an average of at least 2.3% of their staff as new apprentices from 2017-2021. Bodies in scope will be asked to, publish certain information identifying their progress towards the target, and to share further information, detailing the actions they have taken, with DFE. Those in scope of the target include:

• Individual foundation and voluntary aided schools, and SATs/MATs, with more than 250

employees, by headcount in England

• Community and voluntary controlled schools, which will form part of the local authority’s

target, where the LA is the employer and has a total of more than 250 employees (by headcount) in England

• The target comes into effect on April 1st 2017. For more information please email:

PublicSectorApprenticeship.TARGET@education.gov.uk

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What you can do now

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Read further – go to https://www.gov.uk/government/collections/apprenticeship- changes Plan your apprenticeship spending - https://estimate-my- apprenticeship-funding.sfa.bis.gov.uk/ Check out the draft regulations for the calculation, payment and recovery of the Apprenticeship Levy - https://www.gov.uk/government/publications/draft-legislation- regulations-for-the-calculation-payment-and-recovery-of-the- apprenticehip-levy

Our apprenticeship experience

Paula Curtis Senior Pupil Services Officer

A little about Drove Primary School It is a large primary school based in Swindon town centre, we currently have 707 pupils on roll including 3 nurseries. The age range is from 2 to 11 years, our EAL percentage is 87% and our families speak 29 languages between them.

The apprenticeship scheme has been a very positive experience for Drove Primary School. At interview Lumina was a clear choice due to her answers and her professional goals. Lumina started at the beginning of term in September 2015, she quickly became a team member in our office and started completing daily tasks and supporting others with their individual roles. After a short time she was given responsibility for placing orders on our electronic system, checking them in on delivery, distributing in school and resolving queries. Other tasks carried out by Lumina:

• Receptionist duties, dealing with complex issues from parents/staff/outside

agencies/general enquiries

• First Aid person and Fire Marshall
• Data entry in Sims
• School meal administration including FSM applications
• Keep Staff photo board up to date
• Admissions support and nursery waiting list

We were really pleased to be able to offer Lumina a permanent role in our Early Years office from September 2016.

• Reception duties: 1st point of contact for visitors
• General admin
• First Aid person and Fire Marshall

I feel that by doing the apprenticeship I have gained valuable skills and experience of working in a business administration environment which has led to my current role as a full time Pupil Services Administrator in the school I completed my apprenticeship’. I feel we were lucky with Lumina, she is a hard worker who uses her own initiative but will check with me if she is not sure about something. My advice for other schools would be to ask the right questions at the interview stage and try to choose someone who really wants to develop themselves professionally.

APPRENTICESHIP SUPPORT AND KNOWLEDGE FOR SCHOOLS

Support for your school

Amazingapprenticeships.com

APPRENTICESHIP SUPPORT AND KNOWLEDGE FOR SCHOOLS

Becoming a Champion

APPRENTICESHIP SUPPORT AND KNOWLEDGE FOR SCHOOLS

National Apprenticeship Week 2017

 Free resources  NAW toolkits  Live RSS Feed  Speakers (ASK)  Apprenticeship Champions  Record breaker attempt  Events map

APPRENTICESHIP SUPPORT AND KNOWLEDGE FOR SCHOOLS

The Big Apprenticeship Assembly World record attempt

When? Tuesday 7th March What time? 0845 until 0915 For more information contact Helen Richardson 07772357890 helen@workpays.co.uk More details will be announced in early February.