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Apprenticeship funding updates: the key details

The government has published long-awaited details on apprenticeship funding rates and how the levy will work

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The government has published long-awaited details on apprenticeship funding rates and how the levy will work

After much waiting for FE providers, today the government has today confirmed how apprenticeships will be funded, and how the apprenticeship levy will operate.

Education secretary Justine Greening this morning announced the changes in a written statement, in which she pledged that the opportunity to undertake an apprenticeship in England should be “open to everyone”, regardless of background or family circumstances.

Other documents published this morning address the contentious issue of funding for 16-18 apprentices. In August, TES reported concerns raised by figures in the sector that students from the most deprived backgrounds and those from ethnic minorities would be hit hardest by new apprenticeship funding proposals. The proposed rates would have amounted to cuts of between a third and a half in many frameworks, according to analysis by the College of Haringey, Enfield and North East London (CONEL).

Matt Garvey, managing director of the West Berkshire Training Consortium, also argued that the removal of the "disadvantage uplift" will disproportionately affect young people from ethnic minorities.

But the funding guide published today outlines a temporary measures to address the issue. "[In] addition to the price that the employer and provider agree for training to 16- to 18-year-olds on a framework, the provider will also receive a payment from government equivalent to 20 per cent of the funding band maximum for that framework," the document states. "This 20 per cent uplift for providers is a transitional measure designed to support stability whilst providers adjust to the reforms. We will keep it under review and envisage reducing this uplift as more apprenticeship starts are on new apprenticeship standards."

The key details from today's announcement

  • The government acknowledges that providers had complained that its previous proposals to remove "uplifts to rates received by providers for training apprentices from disadvantaged areas" did not take into account "additional costs associated with supporting individuals from disadvantaged backgrounds". Therefore it will "retain, for frameworks only, a simplified version of the current system and provide at least the same level of funding to support those from disadvantaged areas". This will last for one year while the Department for Education conducts "a fuller review into the best way to support individuals from all backgrounds into apprenticeships". Providers will also receive an additional £600 for training on a framework an apprentice who lives in the top 10 per cent of deprived areas, £300 for any apprentice in the 10-20 per cent range, and £200 for those in the 20-27 per cent range. "Overall, government will make available at least the same amount on disadvantage payments as under the current system of more complex uplifts," the document states.
  • Greater funding will be offered for STEM apprenticeships and higher pricing of apprenticeship standards to support improved quality, and greater flexibility to train those with prior qualifications
  • Employers will be given more time (24 months) to spend funds in their digital account, up from the original proposal of 18 months
  • Employers will be able to transfer digital funds to other employers in their supply chains or to Apprenticeship Training Agencies in 2018. A new employer–led group, including the CBI, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF will help develop this system
  • Government will pay 90 per cent of the cost of training an apprentice for smaller employers that will not pay the levy
  • Government will pay 100 per cent of the cost of training an apprentice for small employers that will not pay the levy and who take on apprentices who are aged between 16-18 and 19-24 – as well as care leavers or 19- to 24-year-olds with an Education and Health Care Plan
  • Government will pay £1,000 each to employers and training providers who take on 16- to 18-year-olds, and 19- to 24-year-olds who were in care or who have an Education and Health Care Plan
  • Assistance will be given to training providers to help them adapt to the new, simpler funding model through an additional cash payment worth 20 per cent of the funding band maximum where they train 16 to 18 year olds on frameworks
  • A simplified version of the current system of support for people from disadvantaged areas will be created 

The full list of documents published today can be found on the DfE website.

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