1. Trailblazer Funding Current Position

2. 2014/15 & 15/16 Funding Model for Trailblazers Core Government Contribution Cap (£2 for every £1 from employer) Cap 1Cap 2Cap 3Cap 4 Cap 5 Cap 6 £2,000£3,000£6,000 £8,000£13,000£18,000 Employer contribution if the maximum cap is claimed £1,000£1,500£3,000£4,000 £6,500 £9,000 Additional incentive payments Recruiting a 16-18 year old £600 £900£1,800 £2,400£3,900 £5,400 For a small business (<50) £500 £900 £1,200£1,950 £2,700 For successful completion £500 £900 £1,200£1,950 £2,700 Maximum total Government contribution £3,600£4,900£9,600£12,800£20,800£28,800

3. Principles All amounts have a ceiling of the allocated cap Whatever provider gets from employer will then get double that from SFA (excluding VAT) Does have to be an audit trail of the receipt of money from employer Best to require a standing order from employer, a start is not a start until the SO has been signed off

4. Principles 2 Should already have been charging, if so the employer is no worse off than before Best if one simply sets a price and the employer takes it or leaves it. Idea of a mass range of different negotiated prices is a nightmare Ends the no charge competitor Hence no negotiation

5. The Electronic Voucher System Employers contribution trigger an electronic Voucher system The employer selects a training provider and when learners start payments made to provider System has been devised to prevent HMRC adding VAT to all transactions The ITP’s already have VAT added to their pricing

6. Issues: The above works well for higher level standards with real value to the employer The charge may prove far harder for the less technical standards viz Customer Service, even Business Administration. Will the employer pay £1,000.00 if CAP 1 is the designated level. If pays less the training provider will get correspondingly 3x less

7. Employer Position Employer might not be worse off Employer Incentive payments are paid: 1.For 16-18 yr olds:50% at 3 months 50% 12 months 2.For small businesses 100% at 3 months 3.For completion: at end of apprenticeships Employers have complete flexibility on what they use any incentive payments for Cashflow is the challenge for them

8. Training Provider Position Greater risk Must have employer willing to pay up front for the standard All payments come out of their funding Includes all employer payments Includes the end assessments As increases Trailblazer delivery it makes it very likely will need to submit a growth case

9. Training Provider Risk Standing orders can be cancelled What happens if a learner ‘fails to pass’ either the final end assessment or an end qualification who pays for re sits or re assessments If an SME employer has had Incentive payments but gets rid of the apprentice before they complete. ‘Unsuitable’ apprentice taken on by employer Growth case is delayed or not granted

10. The VAT Conundrum The employer contribution ends all free apprenticeships offers Private Training Providers will have to charge VAT on the employer contribution If the ITP chooses absorb the VAT themselves so charging the employer less than the full CAP figure it does mean that they get a reduced amount from the government This gives colleges a strong bargaining position

11. The Employer Levy Is being introduced and will be collected through PAYE set at 0.5% of an employer’s payroll Employers have an allowance of £15,000 to offset, which means only those with a wage bill in excess of £3m per year will pay. Then get a 10% of the total pot monthly top up. Employers who do fully commit to apprenticeships can get more out than they pay in Public Bodies have been set a 2.3% of workforce target When the levy money used up revert to the 33% contribution of costs – the electronic voucher scheme

12. Assumptions The electronic voucher will replace the current employer contributions for Levy payers until their levy money is used up. That the Levy will only come out via PAYE of those paying £3m wages, and not taken from all businesses but refunded via the £15,000 allowance. (n.b. some do think that is what will happen) BIS says that system still being developed and so cannot say until maybe March

13. Timeline Employers are still in the dark about most of this At this moment in time there will be no employer briefings until a number of key issues are resolved The employers are going to be required to use the Digital Apprenticeship Service to manage their delivery from April 2017 There is no software programme anywhere near readiness to co-ordinate this new system

14. Digital Apprenticeship Service Provides a new Digital Apprenticeship portal for employers To be implemented from 2017 as part of the integrated end to end service Makes it easier for employers to take on apprentices Gives employers greater purchasing power and oversight of the providers Provides transparency of the standards and their costs Employers will be able to: From Feb 2016: Post apprenticeship vacancies on ‘Find an Apprenticeship’ From Oct 2016: Find an apprenticeship course & training provider From April 2017: Manage their apprenticeships

15. End Assessment All Standards are to be end assessed Must be carried out by a different organisation to the training one They will be graded In some cases this will also include an external exam where it is in the standard

17. End Assessment Issues The Training Provider responsible for the quality and has to arrange it and pay out of their money The assessment company has to be registered Issues about impartiality Employer may lose apprentice for a week Who pays for re assessment if fail or exam re sits Whole range of different assessment techniques