Final apprenticeships funding rates: Cuts of up to a third overall

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Plans to slash funding for early years apprentices have been upheld by the Government, despite an outcry.


The final amount of Government funding available for early years apprentices is capped at £2,500 for Level 3 and £2,000 for Level 2.

Yet the cost of training a childcare apprentice has been calculated to be around £8,000, with £7,426 currently available for a 16-18 year old Level 2 apprentice in a deprived area, including top-ups.

There has however been a u-turn on proposals to scrap the supplement for less well-off trainees, with providers to receive an extra £600 for training an apprentice living in the top 10 per cent of deprived areas.

And education secretary Justine Greening today announced an additional 20 per cent cash boost for training providers of 16- to 18- year-olds, over what was proposed in the consultation.

For early years apprenticeships this amounts to up to just an extra £500 to add to the £1,000 incentive (or top-up) originally planned. The separate £1,000 incentive for employers remains in place.

The extra cash however is only a transitional measure. The Government envisages 'reducing this uplift as more apprenticeship starts are on new apprenticeship standards'.

Ross Midgley, of PBD Early Years Training, said, 'The extra 16- to 18- year-old money is welcome but still leads to massive funding reductions in this age group – instead of being halved, the amount payable for a 16-18 year old in inner London will now be cut by about a third.

'The real problem is that the funding bands are too low.'

Mr Midgley added, 'I'm still fearful that the insistence on cash contributions from employers for 19+ apprentices will deter many from going this route.

'I think we will see a big increase in student loans and another major dent in the Government’s apprenticeship target.'

Elsewhere, the levels have been broadly welcomed as a climb down.

Today's announcement encompasses both apprenticeship frameworks and the standards which will replace them.

Despite being submitted last November, the early years apprenticeship standard at Level 3 remains unready for use because of a disagreement between the Government and employers over GCSEs.

The Government, which wants to create 3 million new apprenticeships by 2020, is trying to simplify the funding system, which uses a range of funding rates for apprenticeships depending on the sector and the age and location of apprentices.

Last month, Ms Greening was grilled by the Education Select Commmittee about the proposed reforms unveiled by the Skills Funding Agency.

She was asked by MPs whether she shared the ‘very serious concerns’ and whether the potential impact on younger trainees ‘fit into her social mobility ambitions’.

Ms Greening responded that the the government was looking ‘really carefully’ at the consultation responses, adding, 'We need to try and make sure we get it right.'

Apprenticeship and skills minister Robert Halfon was urged in a letter signed by 54 Labour MPs, to halt the ‘devastating’ cuts.

Gordon Marsden MP, Labour’s shadow minister for apprenticeships, welcomed the 'major U-turn' on the original proposals which, 'would have disadvantaged tens of thousands of 16-18 year old young people, colleges and providers'.

Mr Marsden added, 'However, there still remain big question marks over the Government’s apprenticeship targets and policies, and we need to see the detail on transitional funding for disadvantaged areas.

'Labour will continue pressing them strongly for urgent answers on the digital service, the Institute for Apprenticeships, resources and capacity.'

Speaking about today's announcement, Ms Greening said, ‘These changes will ensure apprenticeships are high quality, meet the needs of employers and provide opportunities for millions more people.

‘After extensive discussions with employers and training providers we are today publishing the final funding policy for May 2017 onwards and details of the new register of apprenticeship training providers.

‘The adjustments we have made to the funding policy since our proposals in August will help ensure that the reforms benefit more employers, providers and apprentices.

Key features of the funding policy according to today's announcement are:

  • An extra 20 per cent of the funding band limit for 16-18 year-olds for training providers in addition to the £1,000 provider incentive as a one year “transitional measure designed to support stability whilst providers adjust to the reforms”. This amounts to £400 for Level 2 apprenticeships and £500 for Level 3. It applies to apprentices on frameworks only
  • Providers will receive an additional £600 for training an apprentice who lives in the top 10 per cent of deprived areas as part of a sliding scale up to 27 per cent. This also applies to apprentices on frameworks only. The Government says this will be in place for the first year while it conducts an equal opportunities review
  • However supplements for ICT qualifications, which are part of existing frameworks, do not appear in the new plans. Previously, a supplementary payment of £471 was made for this.
  • Employers with fewer than 50 people working for them will be able to train 16 to 18 year old apprentices without making a contribution towards the costs of training and assessment up to the funding band maximum. Instead the government will pay 100% of the training costs for these individuals.
  • Also a 100 per cent contribution from government to the cost of training for small employers who take on apprentices who are 19 to 24 year old care leavers or 19 to 24 year olds with an Education and Health Care Plan;
  • £1,000 each from government to employers and training providers when they take on 16 to 18 year olds, 19 to 24 year olds who were in care or who have an Education and Health Care Plan

Apprenticeship levy (which applies to large employers) changes include:

  • A longer period of time for employers to spend funds in their digital account, now with 24 months before they expire, an increase from our original proposal of just 18 months;
  • A commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to Apprenticeship Training Agencies in 2018, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF – the Manufacturers’ Organisation – to help government develop this system so that it works for employers.

  For the full range of documents click here

Bullet points amended 27th November 2016

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