1. Rebecca Rhodes, Senior Associate, UVAC r.rhodes@bolton.ac.uk
The 2017 to 2018 Funding Rules
Rebecca Rhodes, Senior Associate, UVAC

2. Agenda Funding Rules – Purpose and Tests Evidence & Documentation
Key Eligibility Rules
Change of Circumstance
Set Up Tips

3. purpose and mindset

4. Employer ESFA Provider
The Apprenticeship Programme structure : funding agreements
Employer Agreement
Contract for services
Provider Agreement
Employer
ESFA
Provider

5. Structuring a Services Contract
Standard Terms & Conditions
about any agreement of service
Change of Terms
Payment
Disputes
Standard Terms & Conditions
about any apprenticeship
For ESFA Compliance
Eligibility
Quality
Subcontracting
For You
Responsibilities
Standard Terms & Conditions about this apprenticeship
Individual Specifications & Schedules
About this apprentice

6. Binding Terms and Conditions with Sanctions
ESFA & Employer
Provider & Employer
ESFA & Provider
Contract for Services
Institution XYZ
&
Employer ABC
Funding Agreement
Institution XYZ
&
ESFA
As a ‘Main Provider’ The Funding Rules are part of yours and the employer’s Terms and Conditions for delivering apprenticeships using funds in an employer’s digital account or through co-investment
They sit alongside your funding agreement & the ILR Specification

7. Funding Rules Documents & Format
Significant linked suite
Funding and performance management rules for training providers
Apprenticeship funding: rules and guidance for employers
Apprenticeship funding: rules for employer providers
Addendum to the apprenticeship funding and performance management rules - May 2017 to March 2018
Apprenticeship technical funding guide for starts from May 2017
Guidance for Returning Apprenticeships on the ILR from 1 May 2017
ILR specification 2017to2018
The Funding Rules

8. Recovery of Funds or Action by ESFA
will review and monitor your training for value for money. If ESFA think this is not the case:
ESFA may reduce the amount they pay you from government, employer or digital account funds after consulting with you
may take action to recover all or part of government funding if they are satisfied you have breached the funding rules
including payments made via the digital account, via co-investment and including any additional payments
for payments that you or the employer are not entitled recruitment practices detrimental to brand or apprentice
may withhold payments until all employer co-investment has been collected
Will monitor apprenticeship data and HMRC data to ensure roles are genuine. Will take action if recruitment practices is detrimental to apprenticeship or apprenticeship brand

9. Employers – also have responsibilities
The levy employer signs the ESFA Agreement for Employers and through this is bound by the Funding Rules and agrees to :
‘Comply ..[..].. at all times with the requirements detailed in the Funding Rules’ [clause 5.1a]
Assist and cooperate with the Training Provider to enable them to deliver the training in compliance with the Funding Rules …[clause 5.1c]
‘The employer may not, without the prior written consent of the EFA, assign, transfer, subcontract, or in any other way make over to any third party the benefit and/or the burden of this agreement.’ clause 19.1

10. Funding Rule Test
1. Was this apprenticeship eligible for the level of government funding that I claimed?
2. Can I prove this, for this apprenticeship, through the evidence I have collected?
3. Can I prove that my employer has met their responsibilities for this apprenticeship through the evidence I have collected ?
4. Can I prove that I held eligibility evidence for this apprenticeship before the apprenticeship started?
5. Does my ILR/HESA record accurately reflect what happened and when in this specific apprenticeship?
DOCUMENTATION
RATIONALE

11. General Evidence & Document Principles
self declarations need to state the apprentice or employers details and what is being confirmed
evidence can be electronic but you must have other systems and processes to check apprentices exist and are eligible for funds
document, collate and store evidence when an exception occurs
document collate and store evidence when a change of circumstances occurs
provide confirmation that evidence is correct when it is collected
collect evidence that explains the price e.g. skills assessments
Collecting eligibility evidence is paramount BEFORE THE START .
Evidence Pack
single (can be virtual) store of evidence to support funding claims
P207 lists the 28 evidence items needed
must provide evidence that the apprentice exists
reissue revised documents and keep all copies
Key Documents - at the start:
Eligibility declarations
Apprenticeship Agreement
Commitment Statement
Written Agreement with the employer
Written agreements with subcontractors

12. Are evidence collection & management arrangements sufficient?
FUNDING RULE – establish who is accountable for compliance with the rule
Identify best collection / evidence source
Find a point of process where the evidence is already collected/ discussed/reviewed
Confirm where signatories are required
Update/create collection documentation
Confirm when copies & distribution are required
Confirm storage location
Implement compliance checking/management process
IMPACT ON RESOURCING, SKILLS AND KNOWLEDGE
one expert,
many ‘impact aware’

13. Evidence Sources & Accountability
Provider - including :
Employment and wages
satisfied apprenticeship is the most appropriate route
new job role or ‘Significant learning’ gap rationale
‘Materially different’ rationale
minimum duration
not being double funded
Prior learning assessment and evidence for all programme content incl English and maths
Price rationale
Apprentice age
Employer size (<50 exemption from the 10%)
Collection of 10% employer contribution reporting in June Sept December and March
Education Health Care Plan and /or approval to share from the apprentice
Most included in :
Commitment Statement
Apprenticeship Agreement
Written agreement with the employer
all part of the Evidence Pack
Employer evidence to you
written confirmation State Aid declaration
Employee numbers over the 365 days before apprentice is recruited
evidence that the apprentice had time to complete their apprenticeship in their working hours.
finding alternative opportunities for redundant / end of contract staff

14. Managing Compliance Use of Funds Naturally occurring evidence
Evidence of employment
Be satisfied ‘most appropriate programme’
New job e.g.
Job Description
Individual needs significant new knowledge or skills e.g.
New tasks / widening remit
Specialist to generalist in a team
Development need from a performance review
Restructuring
Provider Responsibilities
YOU MUST CHECK
Eligible learner
Eligible employer
You must act if at any point you uncover an error
apprentice reviews
Reasonable steps to check
Genuine Job
20% off the Job Training
Wages
Duration and hours
Standards requirement
Minimum duration

15. funding Rules in practice

16. Is the Apprenticeship Eligible?
minimum 20% off the job is designed into the programme
all activity is fundable and eligible
employer additional costs are clear
Provider listed on the RoATP and RoAAO
Holds a contract for services with the ESFA for non-levy employers
Provision is fundable from the 90/10 or levy
standard or framework published as approved for delivery
Can still go ahead when there aren’t any End Point Assessment Organisations appointed

17. Eligible Costs
Materials ‘should not normally’ have a lifespan beyond the individual apprenticeship being funded
Costs of an apprenticeship taking part in a skills competition if employer and provider agree participation ‘directly contributes to helping the individual achieve the apprenticeship standard’
An apprenticeship at the ‘same or lower level than a qualification that they already hold, if
the individual ‘will acquire substantive new skills’ and you can evidence that
the content is ‘materially different’ from any previous apprenticeship or qualification
You hold evidence of this e.g. (e.g. via a skills analysis , previous/ current module mapping )
If the apprentice is redundant ‘through no fault of their own’:
And you made reasonable efforts to find an alternative employer
their training and assessment is fully funded within 6 months of planned end
If EPA is more than 6 months away there will be funding for 12 weeks

18. Ineligible Costs (p82onwards)
Enrolment, induction, prior assessment, initial diagnostic or similar activity
Training, assessment, exams or tests in any skills and knowledge solely and specifically required to acquire licence to practice, or the certification of L2P - applies even where the licence is required in the apprenticeship standard.
Repeating the same regulated qualification previously achieved unless is is a requirement for the apprenticeship or for any GCSE where a grade C or 4 or higher ……
Registration, examination and certification costs for non mandatory (not specifically listed in the standard) qualifications

19. Ineligible Costs
Time spent by line managers e.g. supporting or mentoring apprentices or time by other staff arranging support except for the apprenticeship
Capital purchases ‘long-term assets’ e.g. ICT equipment
Specific services not related to the delivery and administration of the apprenticeship. This includes the recruitment and CPD of staff, company inductions, managing agents and those providing a brokerage service to an employer or provider
Apprentices must not be asked to contribute, including when they leave the programme early. You / employer ‘must not’ claim funds back from an ex-apprentice
Cant use a student loan to pay for their apprenticeship (where an individual transfers to an apprenticeship from a full-time further education or higher education course, and this course has been funded by a student loan, this loan must be terminated)
You must not pay incentives or inducements or any other payment not authorised by ESFA to the employer in relation to any payment of the apprenticeship programme

20. Is this Role Eligible ? ‘Genuine Job’ (see p27)
contract of employment
contract length sufficient for minimum duration and apprenticeship scope
Wages
support
When the apprenticeship is achieved the apprentice should remain with the employer, where a job opportunity continues to exist and where the apprentice wishes to remain. Where this is not possible, the apprentice must be supported by their provider and employer to seek alternative opportunities.
The ESFA will monitor apprentice destination data and HMRC data to ensure that job roles are genuine and are not created purely for the purposes of the apprenticeship programme.

21. Is this Role Eligible? Zero hours (p48)
must meet all other rules, and apprentices given ‘the same opportunity to achieve their apprenticeship’
Must complete their apprenticeship in their working hours incl off the job – if this is not possible = break in learning
Exceptions to the resident in England rule (p56)
Apprentices must spend ‘at least 50% of their working hours in England’ during their apprenticeship
Funding for Employees living in Scotland, Wales or NI is with their devolved government for those not fitting this category
Those who travel outside the UK or work offshore must have a registered work location in England

22. Off the Job Training (P31onwards)
Must not be delivered as part of normal working duties
Must be ‘directly relevant’ to the apprenticeship
Could include
The teaching of theory (for example, lectures, role playing, simulation exercises, online learning, manufacturer training).
Practical training; shadowing; mentoring; industry visits and attendance at competitions.
Learning support and time spent writing assessments/assignments.
Does not include
English and Maths, progress reviews and on programme assessment
Any training outside apprenticeship normal working hours (also outside the 20%)
Providers must keep evidence that the apprentice spends 20% + on off the job training
Employers must provide you with evidence that the apprentice had time to complete their apprenticeship in their working hours. You keep this in the evidence pack

23. Is the Employer Eligible ?
The number of staff counted for the additional payment / waving of employer contribution is based on the average no. employees in the 365 days prior to the day the apprentice is ‘recruited’.
You then add the apprentices onto this figure to establish eligibility.
ESFA monitoring for withdrawals and breaks in learning followed by starting on a new standards to check for abuse
Genuine Job
Paying wages
Commitment to support
20% minimum off the job, 80% on the job must happen in working hours but away from normal duties

24. Is this Apprentice Eligible
Resident & Right to work in England - Unusual eligibility – Annex A
Age (for incentives and commitment statement signatory)
Role allows time to undertake and complete an apprenticeship in the working day
if they have a student loan this must be terminated
they cannot under take more than one apprenticeship simultaneously – must not be enrolled on another apprenticeship or another DfE funded FE/HE programme at the same time as any new apprenticeship they start
Exceptions to the resident in England rule (p56)
Apprentices must spend ‘at least 50% of their working hours during their apprenticeship in England’
Funding for Employees living in Scotland, Wales or NI is with their devolved government for those not fitting this category
Those who travel outside the UK or work offshore must have a registered work location in England

25. Subcontracting – your accountabilities
If you fail to check, SFA will place restrictions on your future use of subcontractors
RoATP
Main
owning the employer relationship
Must conduct all or ‘some’ of the training
Supporting
Must not exceed £500,000 delivery each year*
Must not deliver 100% of the apprenticeship
Employer-Provider
Can only train their own staff (or connected company/charity)
Must evidence actual costs of delivery as main or subcontractor
Not on RoATP
Must not exceed £100,000 delivery each year*
*The first ‘year’ is 1 May 2017 – 31 March 2018

26. Is the Subcontractor Eligible
Subcontracting Rules are different for non-levy and levy for 2017 to 2018
Page 121 onwards for Levy
Separate addendum for non Levy
You must have a legally binding subcontract contract with the subcontractor with specific terms (p142)
Your employer agreement must set out how the delivery of the apprenticeship including the subcontracted elements will work (para 133 for detail)
There are special conditions for subcontracting for all subcontractor statuses (P143 onwards)
You must act in an open and transparent way
any links between you and any subcontractors must be set out in the employer agreement
You must carry out due diligence checks and not subcontract if you feel the contractor is unsuitable (and a subcontractor cannot subcontract)
You are responsible for dispute resolution
Employer and Subcontractor Agreements need to be ultimately enforceable through the courts

27. Scenario Part 1 Comment on What would you say to the employer Price
A 23 year old Scottish employee has been with the company for four years
They completed the first 18 months of a similar degree to the one which underpins the Standard four years ago then left university
The 27k standard has a mandatory minimum duration of 24 months but a recommended length of 48 months
The employer has 48 employees
Comment on
Price
Eligibility
Evidence
Payment
Actions you would take
What would you say to the employer

28. Scenario Part 2 Comment on What would you say to the employer Price
The employer is part of a larger Group of Companies who in total have 3,000 staff
The employee works 20 hours per week
The employee lives in Scotland and is working in England on secondment for the next 2 years
The parent company have informed your company that their levy share is 6k annually
The employee is an Olympic Bog Snorkling gold medal prospect and will be attending the winter Olympics in 2018
Comment on
Price
Eligibility
Evidence
Payment
Action you would take
What would you say to the employer

29. Scenario Part 3 Comment on What would you say to the employer ? Price
The employee is a former care leaver but they have not told their employer and do not want them to be told
The employer wants you to subcontract with one of two providers, one of whom you know to be poor quality, but the other, though delivering apprenticeships is not on the RoATP.
The subcontractor would deliver two specific modules from a different degree – one is relevant to the apprenticeship the other from a different discipline
Comment on
Price
Eligibility
Evidence
Payment
Action you would take
What would you say to the employer ?

30. PRINCIPLES & RULES UPDATE

31. Price and Payments
The price included the ILR must not include English and Maths, VAT, anything above the cap, framework uplifts
20% end point amount is based on the lower of price agreed /cap
Once agreed price should not increase unless :
End point costs not known at the start (It is ok to add the assessment organisation and the price in at a later date)
Other change of circumstance
If there is a change of circumstances the ILR field for price, and employer contribution will need to change
You can charge VAT on £ amounts over the cap

32. Price and Payments
You have 30 working days to pass the additional payments to the employer
Funding is deducted in the month it occurs, NOT ‘saved’ from an earlier month …….
Levy value in an employer’s account may change if reconciled by HMRC. ESFA will absorb any discrepancy in levy and collect employer contribution direct
Framework uplifts are paid across the life of the apprenticeship
Performance management points and tolerances apply for non levy funding agreements. Additional incentive payments, English and maths and learning support are paid out of your contract value

33. CHANGE OF CIRCUMSTANCE

34. Situations when you must refer to a) the funding rules b) technical funding guide c) ILR guidance for data returns
Change in Circumstances
Change in Price
Break in Learning
beware the impact on duration
Apprentice withdraws
Change in apprenticeship
restarting on 1st may
Change in main provider
Change in employer
Redundancy
more than 6 months before the end of the programme
less than 6 months before the end of the programme
If any element of the agreement for the apprenticeship between you and the employer changes; revise and reissue or create new agreements
Don’t guess what to do in an unfamiliar situation – check what to do:
Employer may also pause or end an apprenticeship via the Apprenticeship Service

35. Action that you must take as set out in a) the funding rules b) technical funding guide c) Guidance for returning apprenticeships on to the ILR
Funding Rules (P33+) set out what must / will happen to :
costs/price, apprenticeship duration and key dates, funding, additional payments
employer actions needed in the apprenticeship service digital account
Technical Funding Guide sets how changes affects funding calculations and earnings
ILR Guidance for Apprenticeship ILR Returns sets out what should be changed in the ILR/ HESA return
You Must Update ILR/HESA
funding and price / revise price
pay back over payment of employer contribution (as per your agreement)
repay government over payment
Apprentice status changes
Apprenticeship dates
Price /Residual Price
You must reissue key documentation to all parties :
commitment statement

36. Working with the Funding Rules
Collect and confirm evidence, complete commitment statement, apprenticeship agreement, services contract and begin evidence pack before the apprenticeship starts
Cooperation and collaboration in across academic, finance, employer engagement, records, admissions teams is key to share status of the apprentice on their programme
Create governance, briefings and processes to ensure that everyone who needs to know does know
change of circumstances must be well known, automatic, trigger points for cross organisation action - i.e. How would the team returning the monthly HESA know?
ACT QUICKLY when something occurs that affects eligibility for funding, or price
Don’t guess - or speak to your Provider Manager
Update the HESA/ILR – and employer action is required on the apprentice record to release the payment ‘double lock’
Close relationship with the employer is key – who carries out the employer/ apprentice reviews? early warning of changes/ action to ensure payment

37. Questions For help Contact : ESFA Provider Manager
Any queries or anomalies - me
For new Apprenticeship providers
UVAC Deep Dive webinar programme to be run summer / autumn and includes :
Apprenticeship Documentation
The ILR and Data
Performance Management
Subcontracting
On programme assessment and review