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Sector Forum – Health, Health & Social Care & Childcare November Apprenticeship funding and loan funding
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2. To cover Apprenticeships The digital apprenticeship service (DAS)
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To cover
Apprenticeships
The digital apprenticeship service (DAS)
Institute for Apprenticeships
What is changing
Register of apprenticeship training providers
Loans
Expansion
Qualifications and rates
Growth, subcontracting and the future
Key documents
Pearson summaries
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3. Digital apprenticeship service (DAS)
All employer will have access to a digital apprenticeship service (DAS) through which everything from choosing an apprenticeship and certification will be channelled.
From May 2017 levy payers will also use it to pay for training. Employers will have a digital account and apprenticeship funds will be paid into the account via the DAS which employers will then use to pay providers (or themselves in some cases) for apprenticeship training.
By 2018 earliest, 2020 latest, every employer in England will use the system to pay for apprenticeship training.
400 employers and 200 training providers have tested the system.
More were invited to take part in testing during October and November 2016; representative sample selected and will test service from start to finish. 3

4. Institute for Apprenticeships (IfA)
An independent and employer-led Institute for Apprenticeships will be created in April 2017.
Role will include regulating the quality of apprenticeships.
Following Sainsbury Review and the Post-16 Skills Plan: will be renamed Institute for Apprenticeships and Technical Education, and responsible for the post-16 framework.
Will have remit to develop coherent strategy and put employers at the heart of designing standards across all technical education – college-based as well as apprenticeships.
Final remit not clear but direction of travel is for a much larger role.
Peter Lauener appointed Shadow CEO (on part-time basis alongside his responsibilities as CEO of SFA and EFA).
Permanent CEO will be appointed in 2017. 4

5. What is changing Frameworks to standards, ongoing
Apprenticeship levy, April 2017
Apprenticeship funding, May 2017 5

6. Levy, April 2017
On pay bill of UK employees at rate of 0.5%, and allowance of £15,000 each tax year.
So, payable on pay bills over £3 million (0.5% x £3 million = £15,000).
Levy calculator estimates if organisation will pay, how much they will have available to spend, and how much government will contribute.
Government makes 10% top up to monthly fund.
Funds expire after 24 months.
Once levy used, move over to system for non-levy paying employers.
In 2018 levy-paying employers will be allowed to transfer up to 10% of the annual value of funds entering their digital accounts to other employers or ATAs. New employer working group created by DfE to help further develop proposals for a transfers system that works for employers. 6

7. Funding, May 2017: Start of the new system
Text in blue italics shows new rules confirmed in October after consultation on proposed rules from August.
Start date for new apprenticeship funding system 1 May 2017.
Apprenticeship levy comes into effect on 6 April 2017, funds will appear in employer’s digital account just before the end of May for levy paid on April payroll.
Payments made to providers under new system monthly in arrears for training they report delivered. 7

8. Funding, May 2017: Prior qualifications
Employers can use levy funds /access co-investment to train individuals on apprenticeship at same or lower level than a qualification they already hold, including previous apprenticeship if this allows individual to acquire substantive new skills and the content of the training is materially different from any prior training or a previous apprenticeship. 8

9. Funding, May 2017: Components
The levy
How funding will flow
Employer contribution
Additional payments
Funding rates
Funding flow
Contribution
Additional payments
Rates
Levy
Frameworks and standards
Frameworks
Standards
Non-levy 9

10. Funding, May 2017: How funding will flow
Funding flow
Frameworks and standards
Levy
Non-levy
Employer and government contribution into DAS.
Paid by employer to provider via DAS.
Employer contribution paid to provider according to agreed schedule, government contribution to provider paid via SFA contract.
All employers will use DAS to pay for training and assessment by 2018 earliest, 2020 latest. 10

11. Funding, May 2017: Employer contributions
Frameworks and standards
Levy
Non-levy
Price negotiated.
Employer pays 100%.
Government tops up levy by 10%.
Once levy spent, employers use same model as non-levy payers.
Funding band is maximum spend.
Employers co-invest 10% (mandatory).
Funding band maximum amount towards which government will co-invest 90%.
Small employers (<50) do not have to co-invest 10% for 16-18s, care leavers or 19-24s with a LA EHC plan. 11

12. Funding, May 2017: Additional payments
Frameworks and standards
Levy and non-levy
16-18 year-olds
£1,000 to employer and £1,000 to provider.
20% of funding band maximum, for those on frameworks, to provider. Transitional measure. Will be kept under review and reduced as more apprenticeship starts are on new standards.
Disadvantage
For year-old care leavers or with an LA EHC plan
20% of funding band maximum, for those on frameworks, to provider. Transitional measure. Will be kept under review and reduced as more apprenticeship starts are on new standards.
£600 for those on framework living in top 10% of deprived areas (as per IMD), £300 for those living in next 10%, £200 for those living in next 7%. In place for the first year, will review best ways of ensuring equal opportunity to all, regardless of circumstances.
English and maths
Flat rate of £471 for each subject to provider.
Support funding
£150 each month can be claimed by providers for apprentices with learning or physical disabilities requiring extra learning support.
Where evidence of greater learning support needed additional funding may be provided. 12

13. Funding, May 2017: Funding rates
Levy and non-levy
All apprenticeships allocated to one of 15 funding bands, upper limit from £1,500 to £27,000.
Upper limit caps maximum amount of digital funds levy-paying employer can use towards an apprenticeship, and maximum price government will ‘co-invest’ towards for non-levy paying employer.
Final funding negotiated, can go above maximum but this would be 100% employer’s own money.
Frameworks
Standards
Some frameworks allocated to higher bands than originally in August.
Individual framework pathways allocated to nearest funding band based on current rate of government funding for adult apprentices.
STEM framework pathways increased funding.
For year-olds and year-old care leavers or with an LA EHC plan 20% of funding band maximum, for those on frameworks, to provider.
Some standards allocated to higher bands than originally in August.
Allocated to new funding bands according to funding band that most closely aligns with current, or a new band where more now available at top end.
New system will recognise standards are ‘more expensive to deliver’ by allocating higher funding bands to apprenticeship standards. 13

14. Funding, May 2017: Funding bands
Number
Band upper 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 14

15. Funding, May 2017: Comparing old and new
Current
Frameworks
Standards
After May 2017 15

16. Funding, May 2017: Comparing old and new
Current Frameworks
Current Standards
New Frameworks
New Standards
Negotiation  
Basic rate
Based on qualifications
Standard cap
Framework band
Standard band
Age
16-18 (full)
19-23 (50%)
24+ (-20% of rate)
16-18 payment
16-18s £1,000 to employer and £1,000 to provider, and 20% of funding band maximum to provider
16-18s £1,000 to employer and £1,000 to provider
Employer contribution
50% optional
33% mandatory
Levy paying employers100% mandatory
Non-levy paying employers 10% mandatory
Employer reduction/ incentive
25% large (> 1000) employer reduction
Small (< 50) employer payment
Small (< 50) employers do not contribute for 16-18s, care leavers or with LA EHC plan; government pays 100%
Achievement/ success
20% achievement rate
Success payment
20% paid at end of apprenticeship
20% paid once EPA completed
Disadvantage
Uplift (IMD)
19-24 care leavers/with LA EHC £1,000 to employer and £1,000 to provider, and 20% of funding band maximum to provider
£600 living in top 10% of deprived areas (IMD), £300 living in next 10%, £200 living in next 7%
19-24 care leavers/with LA EHC £1,000 to employer and £1,000 to provider
Area uplift
English and maths
16-18 £471, £362, 24+ £290 to provider
£471 for each subject to provider
Learner support 16

17. Register of apprenticeship training providers
New register (RoATP) for delivery from May 2017, now open, anyone already on ROTO will need to apply.
3 application routes – depend on how operating and who delivering to:
Main: for providers who can be selected by levied employers, and by other mains to work as subcontractor.
Supporting: for providers offering specialism, and who only want to deliver as subcontractor, able to deliver up to £500,000 training per year, before being required to apply to the main route.
Employer-provider: for employers who want to provide training to own staff (main or supporting).
Need to pass tests in financial health, due diligence, quality, capacity and capability, differentiated according to route.
Organisations delivering <£100k training per year as subcontractor don’t need to be on RoATP. (Original proposal: any organisation wanting role in delivery needs to be on RoATP.)
All main providers need to directly provide training for each employer’s apprenticeship programme, but not significant majority. If employer’s request and agree, mains can also bring in subcontractors to deliver whole/part of programme. (Original proposal: main would always need to deliver significant majority of programme).
SFA will continue to monitor and consider making further changes if concerns about quality and levels continue.
During first year parent company guarantees will be accepted for applications to give providers time to adapt to new requirement. (Original proposal: no longer accept parent company guarantees for applications to register.)
Deadline: First selection of providers e drawn from those who complete applications by 25 November 2016, 5pm.
SFA running procurement exercise for delivery to employers that will not use digital account.
Organisations must apply to RoATP main route and complete invitation to tender for procurement.
Deadline: 25 November 2016, 5pm, and for those successful, contracts will begin 1 May 2017, end 31 July 2018.

18. Loans
Aged 19+.
Academic, vocational, technical and professional qualifications at levels 3, 4, 5 and 6.
19-23s availability of loans at level 3 does not replace legal entitlement to full funding for those undertaking their first full level 3.
Provide a source of fees support for learners.
Not means tested.
Repayments like HE: once earning more than £21,000 a year.
Provider needs loan facility from SFA.

19. Loans: expansion Loan funding extended in 2016/17 in two ways:
Age – now available year-olds (previously only available to 24+ year-olds).
Level – now available to those studying for a level 5 or 6 qualification (previously only available for levels 3 and 4).
In addition, far simpler process for adding qualifications to the catalogue.
Applications for the expanded advanced learner loan were open from May 2016 for courses starting from 1 August 2016.

20. Loans: qualifications and rates
Qualifications eligible on advanced learner loans qualifications catalogue.
Automatically: QAA Access to HE Diplomas, A-level, AS-level, Tech level, Applied general qualifications in DfE performance tables.
Submissions: qualifications above 15 credits/150 glh, support progression to and through higher-level technical and professional education and skills, have clear focus on a particular occupational area, direct entry to a specific job role, support continuing professional development in an occupation, upskilling or reskilling in occupational area.
Rates same as AEB.

21. Loans: growth, subcontracting and the future
SFA stopped growth requests for a whole but now re-opened and will retain rolling application approach – can continue to apply for increase to 2016/17 facility at any time.
SFA will stop allowing subcontracting for loans from 2017/18.
Also require that courses offered via subcontracting end in 2016/17 (July 2017).
In exceptional circumstances SFA may agree extension of subcontracting arrangements beyond July 2017: prime contractor (not subcontractor) should contact SFA provider services manager and provide a short business case in support of request. 
Post-16 Skills Plan sets out a role for the Institute for Apprenticeships in Technical Education, and specifically maintaining register of eligible qualifications.
Potential new register for those not on ROTO wanting to offer loans – no news as yet…  

22. Key documents Overview
Justine Greening’s written ministerial statement on supporting apprenticeships.
Press release: New apprenticeship funding to transform investment in skills.
Funding, and the levy
Apprenticeship funding from May 2017: How apprenticeship funding will work, including funding bands.
Apprenticeship technical funding guide for starts from May 2017: Technical details of the new funding system.
Apprenticeship funding and performance management rules 2017 to 2018: Draft rules that will apply.
Apprenticeship funding: how it will work (the levy): Details of the levy for employers.
A revised apprenticeship funding calculator: To help employers understand what levy they will pay and how they could use the new digital service to plan and fund training.
SFA Digital blog: to help people keep up to date with the development of the DAS.
Register of apprenticeship training providers (RoATP)
Working with the SFA as an apprenticeship training provider: Information for all providers who wish to offer apprenticeship training in England from May 2017.
Register of apprenticeship training providers: Brings together guidance on how to apply to the RoATP.
Apprenticeship employer-provider guide: What employers need to do to become an apprenticeship training provider.
SFA presentations: register of apprenticeship training providers, and invitation to tender: apprenticeship training delivery for employers without a digital account.

23. Key documents For providers and learners
Qualifications eligible for loans, and the funding hub (SFA)
Practitioner site (Student Loans Company): information about loans and useful information, tools and materials.
For learners
Information about taking out loans (BIS): provides an overview, what they will receive, eligibility, how to apply, repayments, and the bursary fund.
Information about taking out loans (National Careers Service)
For providers
Operational and policy information for colleges, training organisations and employers: overview, and detail (SFA)
Rules for designating qualifications for loans (SFA)
Detailed funding rules (SFA)
Information about the removal of subcontracting for loans from 2017/18 (SFA)

24. Pearson summaries
Pearson Handy Guide to Apprenticeship reform is designed to give a quick overview of Apprenticeship reform in England. It is written to help you understand the different changes that are currently being implemented or that are due to be introduced throughout 2016, 2017 and beyond.
Pearson Funding Focus:
The Apprenticeship levy from April 2017
Apprenticeship funding from May 2017
Confirmed allocation of frameworks and standards to new funding bands from May 2017
Comparing existing apprenticeship funding with new apprenticeship funding from May 2017
The new register of apprenticeship training providers (RoATP)
Advanced learner loans – Where to find out more
Funding News brings you a weekly funding update. Sign up here or
For funding queries,

25. Questions?