This month, a levy on large employers to fund the expansion of the apprenticeship programme came into force. And next week will bring the introduction of a new funding system for apprenticeships. But how exactly will the new approach work? Tes answers the crucial questions.
What is an apprenticeship?
In the simplest terms, apprenticeships combine working with studying for a work-based qualification. They can be taken up by new or existing employees, and can sit at anything from level 2 (GCSE equivalent) up to level 7 (on a par with a Master’s degree). They take between one and four years to complete. According to the latest guidance, 20 per cent of an apprenticeship must consist of off-the-job training.
Do apprentices get paid, and what benefits are they entitled to?
Yes, they do get paid - but usually less than other employees. The minimum wage for apprentices is £3.50 an hour. This applies to those aged under 19, and to older apprentices during the first year of the programme. However, the Department for Education stresses that, according to the most recent survey, the median pay for apprentices at levels 2 and 3 is £6.70 per hour. Even though apprentices are only entitled to a lower rate of pay than colleagues, they also miss out on several means of support available to college students, such as Care to Learn childcare grants, travel discounts, council tax exemptions and student bank account packages.
So what’s the apprenticeship levy?
Large companies across the UK with an annual payroll of more than £3 million now have to pay the levy. This is set at 0.5 per cent of their annual pay bill, and companies pay in the same way that they pay income tax or national insurance.
Levy-paying employers in England will then have a digital account, which will hold their levy funds. The employers have 24 months to spend their vouchers on apprenticeships and training, directly paying an approved training provider an agreed price for their provision. The government says that the levy will double the annual investment in apprenticeships in England to £2.5 billion by 2019-2020, compared with the 2010-11 level.
Who pays for apprenticeships?
The cost of training an apprentice is split between the employer and the government. However, how much each party pays is dependent on several factors. Large firms that pay the levy are required to pay out 0.5 per cent of the annual payroll bill, effectively as a tax - but they can then access this money (along with a 10 per cent top-up provided by the government) to fund apprenticeships.
For smaller firms that don’t have to pay the levy, there is a separate system. They contribute 10 per cent of the cost of each apprenticeship they create, while the government funds the rest (this system also applies to levy-payers that have already spent their levy allocation but want to hire additional apprentices). Several other financial incentives are available for employers to encourage them to hire 16- to 18-year-olds, young people who have been in care and those from the most deprived parts of the country.
How do apprenticeship standards and apprenticeship frameworks differ?
Both of these terms are written definitions of the learning requirements for apprenticeship programmes. The 2013 Richard Review called for the “overly detailed” frameworks to be replaced with simpler standards set by groups of employers - “preferably” one per occupation. However, there is no cap on the number: so far, 161 have been approved and a further 223 are in development.
This process of the transition to the standards is ongoing: between August and January, there were 7,500 apprenticeship starts on standards - and 251,300 on frameworks.
How are apprenticeships assessed?
The most notable change under the new apprenticeship standards is that an apprentice’s competence must be independently assessed at the end of the programme - instead of the previous system of continuous assessment - and this end-point assessment should be graded.
The organisation carrying out the endpoint assessment must be approved by the Education and Skills Funding Agency. In recent months, end-point assessments have been the subject of much criticism, as a large proportion of the new apprenticeship standards do not yet have an end-point assessment attached to them - meaning apprentices can start programmes before an assessment has been put in place.
What is the role of the Institute for Apprenticeships?
The Institute for Apprenticeships, which was launched this month, is responsible for: the development and maintenance of the quality criteria for the approval of apprenticeship standards and assessment plans; supporting the development of standards and assessment plans by employer groups; advising on the maximum amount of government funding that can be drawn down by employers; and quality assuring end-point assessments.
Which FE providers are allowed to deliver apprenticeship training?
It’s a long story. The government’s goal was to have two registers of providers approved to offer apprenticeships: one for those that deliver to levy-payers, and another for those delivering to smaller firms. After long delays, the former was made public last month and includes more than 1,700 approved providers - although a number of large colleges (including the majority in Birmingham) did not make the cut.
Perhaps as a result of the fallout from this, the latter register has been “paused”: existing contracts are now being extended until the end of the year, meaning no new providers can be added until 2018.
Providers not on the register do still have one way of offering apprenticeship training, though: subcontracting for one of those that did make it on to the register.
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