Mark Dawe, chief executive of the Association of Employment and Learning Providers
The EU referendum result meant that the Government was unable to meet its June deadline for announcing the next raft of apprenticeship levy reforms. While we were informed of their main elements in April, important details are still to be revealed and many employers remain mystified about how the levy system will work.
The levy will be calculated on 0.5 per cent of the payroll bill of all employees across the whole of the UK. However, employers will not pay the first £15,000 of the levy. Therefore the annual payroll bill has to be £3 million before an employer starts paying. It is estimated that more than 20,000 large organisations will be within the levy’s scope, including public sector employers such as NHS trusts and universities.
These employers will pay their levy into a digital account on a monthly basis from April 2017 and, with a 10 per cent top-up added by the government, they will be able to reclaim all of the money for training apprentices.
A separate funding system will apply to non-levy-paying employers or SMEs who want to offer apprenticeships. In due course they will also be given digital accounts into which they must pay a financial contribution if they want to receive the Government’s co-investment back. The size of the Government’s share will be announced in the next set of levy announcements. We are hopeful it will be large.
The announcements should also tell us how much total funding will be attached to each type of apprenticeship – such as the framework (for definition, see box) for an early years educator. The total funding will be the same for each framework (or new standard) irrespective of whether the employer is a levy-payer or not. Under the current pilots, known as trailblazers, the Government has allocated every standard to one of six funding bands ranging from £3,000 to £27,000 with further incentive payments on offer.
These caps may be reset under the new announcements because the current co-investment requirements under the trailblazers are very likely to change. As far as additional incentives are concerned, we already know that the Government will retain the one which encourages employers to employ 16- to 18-year-old apprentices, although the actual amount has yet to be confirmed. However, the current incentive payment to training providers for successful programme completion by an apprentice may not be part of the new regime.
The Government has confirmed that it will continue to provide separate funding for English and maths provision within an apprenticeship programme. This will be paid directly to the training provider and there is no indication that the flat rate system of payment per learning aim (currently £471) will change for either an apprentice doing GCSEs or functional skills. Resits are very unlikely to attract additional funding and most of the new standards (see box) are allowing for the learning of functional skills.
The next set of announcements will lay down more principles within the system that will not be changed between now and next April. However, there will be a period of consultation until October where the levels of incentives, co-investment and caps can be commented on to warn the Government of any unintended consequences for certain sectors and age groups. It should be an interesting few months.
The Association of Employment and Learning Providers (AELP) has long maintained that any sizeable cash contribution required from the smaller employers would put the vast majority of them off from engaging in the programme.
We have argued that squeezing SMEs out of apprenticeships would be disastrous for two main reasons. First, they are responsible for offering more than half of the 500,000 apprenticeship starts each year and they are important players in the economy in terms of innovation and improved productivity. Secondly there are many parts of the country, especially in rural areas, where they are the only employers able to offer young people apprenticeship opportunities. The vote to leave the EU has now accentuated the need for Britain to train home-grown talent, which makes SME engagement in apprenticeships as vital as ever.
The current reforms are a key part of the Government’s drive to increase the number of apprenticeship starts to three million during this Parliament, which equates to an additional 100,000 starts a year. Critics of this ambition are concerned that the chasing of the target will lead to a dilution in the quality of the programme. AELP has never accepted that the achievement of higher volumes and the maintenance of quality provision are mutually exclusive aspirations, but the introduction of funding caps without a floor instead of a fixed funding rate for each type of apprenticeship is a concern.
This is because the Government wants employers able to negotiate with providers the price that they pay providers for delivering the training. Negotiation is not uncommon under the current system but without a floor under the new caps, competition between providers may force prices downwards to a level where quality is adversely affected.
We have also voiced concerns to the Government about the new programme end-point assessment requirements, which may throw up significant challenges for both employers and providers.
THE APPRENTICESHIP STANDARDS
By Hannah Crown
Apprenticeship standards are a two-page summary of the skills, knowledge and qualifications that employers want apprentices to have. They are devised by groups of employers known as ‘trailblazers’. Across the country, they are replacing the previous system of apprenticeship frameworks, which were devised by sector skills councils and set out packages of qualifications for each apprenticeship. As well as being shorter, standards also differ from frameworks in that, for the first time, an end-point assessment must be independently carried out.
Currently, 115 standards are ready to go in sectors from aerospace to welding. But none from early years, despite the trailblazer group of early years employers submitting a Level 3 standard to the Department for Business, Innovation & Skills (BIS) last November. So what’s the hold-up?
Two skills included in every apprenticeship – regardless of sector – are English and maths. In most sectors, apprentices can demonstrate they have met these requirements via either functional skills tests or GCSEs. But the early years Level 3 framework currently in force had functional skills removed, leaving a minimum grade C in English and maths GCSE as the main alternative. Indeed, GCSEs are now a ‘workforce requirement’ of the Level 3 early years educator qualification (the qualification is now an integral part of both the current framework and the draft standard).
Because of staff shortages, which many link to the recent GCSE requirements, the trailblazer group has not followed the this example. It submitted the standard asking for ‘all reasonable equivalents’ to GCSEs to be included as alternatives. But the Department for Education, which is working with BIS, has a goal is to improve literacy and numeracy standards in the workforce. It refused to publish the standard as it is, with the request for equivalents such as functional skills, and instead published it with the phrase taken out. (It is not yet useable because the assessment which goes with it has not been published.)
However, last week, childcare minister Sam Gyimah conceded there was a need to review the GCSE requirements, saying ‘a review of requirements for Level 3 qualifications will be delivered alongside the workforce strategy’ later in the year. Add into the mix the ‘Save Our Early Years Campaign’, launched by awarding body Cache, is calling for government to allow ‘equitable alternatives’ such as functional skills. So far, 1,500 letters have been sent to education secretary Nicky Morgan in support.
Many people would support raising literacy and numeracy levels, and the sector is not uniformly against the GCSE requirement. Some have also criticised the assessments used for functional skills, saying they are too easy to cheat.
Where does this leave the other levels? The trouble is, as a trailblazer spokeswoman said, ‘We can only move forward with other levels once Level 3 is agreed because that is the basis of all our work.’ So until this is resolved, the apprenticeship standards at Level 2, and the sector’s first standards at levels 4 and 5, 6 and 7, which Nursery World understands are in draft stage with assessments written, are on hold.
Some in the sector fear that all this may become redundant because the new funding arrangements could kill off demand from employers.
A source close to the trailblazers said, ‘Apprenticeships have never been very popular in the early years sector. If I wanted to completely sabotage the qualification framework for the early years workforce with the GCSEs issue, coupled with the impact of the apprenticeship levy, and upfront contributions on the take up of apprentices, I couldn’t have done a better job.’