This document provides an overview and summary of recent reforms to apprenticeship funding in England. Key points include: - Employers will have more control over apprenticeship content and funding, with funding going directly to employers who can purchase training from providers using a digital account. - Funding bands have been established for apprenticeship standards, with higher funding allocated to some standards relative to equivalent frameworks. - Additional support includes £1,000 payments to employers and providers for training 16-18 year olds or disadvantaged adults, and funding for English/maths training and additional learning support. - Rules have been established for areas like prior qualifications, cross-border funding, transferring funds between employers

1. An Apprenticeship Update
a Guide for Employers and Training Providers
27th October 2016

2. WHY? Rationale for Reforms
Rationale for Reforms
Employer Driven
Employers designing
apprenticeships to make
them more responsive to
their needs and the future
economy, and controlling
funding
Simplicity
Simplifying apprenticeship
standards so that they are
shorter and more accessible
Quality
Improving the quality of
apprenticeships so that
they are viewed with the
same esteem as University

3. Apprenticeship Funding and the
Changes planned
Provider
control
• Provider funded for delivery of Specification of Apprenticeship
Standards for England (SASE) framework
• Employer contribution expected but not always collected
Transition
• Employers have more control over content of Standards
• Funding partially to employer (incentives) and provider
• Employer contribution in cash
Employer
control
• Content and delivery controlled by employer
• Large employers pay 0.5% paybill tax as levy with a 10% top-up
• Employer uses digital voucher to pay for training and assessment
3

4. Final funding levels announced on
the 25/10/16 include:
• Higher funding for STEM apprenticeship frameworks and
higher pricing of apprenticeship standards to support
improved quality, and greater flexibility to train those with
prior qualifications;
• 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;
• There is 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
• A 90 per cent contribution from government to the cost of
training for employers that will not pay the levy; meaning a
contribution of 10% for SMEs

5. Final funding levels announced on
the 25/10/16 include:
• A 100 per cent contribution from the government to the cost of training for
small employers, that will not pay the levy and who take on apprentices who
are 16 to 18 years old, 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;
• Help for training providers to adapt to the new, simpler funding model
through an additional cash payment equal to 20 per cent of the funding band
maximum where they train 16 to 18 year olds on frameworks; and
• A simplified version of the current system of support for people from
disadvantaged areas, to ensure the opportunity to undertake an
apprenticeship is open to everyone, no matter where in England they live,
their background or family circumstances.
• an important intervention from the new apprenticeships minister, Robert
Halfon.

6. Subcontracting saved in final
apprenticeship plans
The proposals published in August stated that the main provider would need to
directly deliver at least half the training for each apprentices.
• However, it has been announced that “At the employer’s request, and
subject to their agreement, main providers will be able to bring in
subcontractors to deliver whole, or parts of, frameworks or standards.”
At the moment we are not sure what evidence will be required for
this.
• Nevertheless the main provider will have to directly delver some of the
training for each employers apprenticeship programme – but will this will
not need to be significant proportion.
• Providers with contract values below £100k will now not have to join the
register (however, they still can apply if they wish to) – this requirement
appears to have been dropped in the latest document release.
• The document released on the 25/10/16 states: “For the time being, we will
retain the threshold, which means that organisations who want to deliver
less than £100k of apprenticeship training per year as a subcontractor will
not need to apply.”

7. Disadvantage Uplifts
• In the original proposal it was anticipated that
Disadvantage uplifts would go.
• Which would have been circa 32% additional
funding for those living in the most deprived areas
being removed.
• As reported in the FE Week the Apprenticeship
Minister as stated that that the government will be
“investing £60 million in supporting the training of
apprentices from the poorest areas in the country to
ensure social mobility for all.”

8. Disadvantage Uplifts
According to government sources
• “Overall, government will make available at least the same amount on
disadvantage payments as under the current system of more complex uplifts”
• “These payments will come direct from the government and will not be deducted
from an employer’s digital account”
• “This will be in place for the first year while we review the best ways of ensuring
apprenticeships provide equal opportunity to all, regardless of their circumstances.
This review will look at the role of employers, as well as training providers, and the
differences in approach that may be needed in different parts of the country. We
will work with Opportunity Areas to develop and test different approaches”
Deprived Area as applied in
the Index of multiple
Deprivation
Uplift
Apprentice who lives in Top 10% Deprived Area £600
Apprentice who lives in the next 10% Next 11-20% Deprived Area £300
Those Apprentices in the next 7% Next 21-27% Deprived Area £200

9. Proposals in August Final Policy
Expiry of digital funds after 18 months Extended to 24 months – helping employers to prepare
for the new system and to adapt training programmes
Support for 16-18 year old apprentices -
£1000 payment to employers and training
providers
Retaining the £1000 payments plus extra government
funding to provide a transitional 20% uplift for providers
training 16-18 year olds on a framework. Also applies to
19-24 year olds formerly in care or have a Education and
Health Care plan
Removal of disadvantage uplift Retain a simplified version of current system for one
year to support those from disadvantaged areas whilst
review best way to support disadvantaged groups
Key changes since August
• In August, we published our proposals for apprenticeship
funding. Since then, we have been listening to employers,
training providers and other stakeholders to help us
develop our final position. The adjustments we have made
will help ensure that the reforms benefit more employers
and apprentices.

10. Funding Example - The way it is Now
Skills Funding
Agency
Training
Organisation
Learning /
Assessment
Awarding
Body
Apprenticeship Business Administration Level 2 16-18 19-23 24+
Drawdown (Per Learner)
Pearson Edexcel FS English Level 1 £776.35 £362.00 £289.60
Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60
Pearson BTEC Level 2 Diploma in Business Administration (​QCF) £4,270.97 £1,991.50 £1,593.20
Drawdown £5,823.66 £2,715.50 £2,172.40
Total Drawdown (Inc. Avg Uplift of 10%) £6,406.03 £2,987.05 £2,389.64
Apprenticeship Customer Service Level 2 16-18 19-23 24+
Drawdown (Per Learner)
Pearson Edexcel FS English Level 1 £776.35 £362.00 £289.60
Pearson Edexcel Functional Skills qualification in Mathematics at Level 1 £776.35 £362.00 £289.60
Pearson BTEC Level 2 Diploma in Customer Service (​QCF) £3,594.35 £1,676.00 £1,340.80
Drawdown £5,147.04 £2,400.00 £1,920.00
Total Drawdown (Inc. Avg Uplift of 10%) £5,661.74 £2,640.00 £2,112.00
Funding Drown Down by the Provider from the Skills Funding Agency
Awarding Body
Registration and
Certification Fee
£175
Awarding Body
Registration and
Certification Fee
£175
English Mathematics
Main
Learning Aim
Area and
Disadvantage
Uplift
Multipliers
= Total
Funding
Drawn Down

11. Funding and delivery comparison
The way it is Now
Proposed Plans
Skills Funding
Agency
Training
Organisation
Learning /
Assessment
Awarding
Body
Employer
Contribution (Levy)
SME payment
DAS/ Skills Funding
Agency Employer
Training
Organisation
This could be the
Employer
Awarding
Body
Assessment
20% of the
Funding
Learning
80% of the Funding
to also include Awarding Body fees for
any qualification within the new
Standards
Employer Pays LEVY to HMRC no mater if they access apprenticeships or not

12. Funding Example
Proposed Plans
Employer
Contribution (Levy)
SME payment
DAS/ Skills
Funding
Agency
Employer
Training
Organisation
This could be
the Employer
Awarding
Body
Learning
£1,200 of the Funding
to also include Awarding Body fees for
the embedded qualification which is
anticipated to be Circa £150 leaving
£1,050 for Training + any uplift
Employer Pays LEVY to HMRC no mater if they access apprenticeships or not
Learning
£1,600 of the Funding
to also include Awarding Body fees for
the embedded qualification which is
anticipated to be Circa £150 leaving
£1,400 for Training + any uplift
End Point
Assessment
c£400 of the
Funding (this will
have to be paid out
before you can draw
down funding
Customer Service Level 2 £1,500
there is no additional uplifts for
learner age or being within London
Note: Fees dependant on individual awarding body and assessment organisation fees
End Point
Assessment
c£300 of the
Funding (this will
have to be paid out
before you can draw
down funding
Administration Level 2 £2,000
there is no additional uplifts for
learner age or being within London
Maths and English Additional Funding
Outside of employer contribution £471
for each
Maths and English Additional Funding
Outside of employer contribution £471
for each

13. Funding and Delivery Comparison for
SMEs
The way it is Now
Proposed Plans
Skills Funding
Agency
Training
Organisation
Learning /
Assessment
Awarding
Body
Employer
Contribution SME
payment
DAS/ Skills Funding
Agency Employer
Training
Organisation
This could be the
Employer
Awarding
Body
Employer Pays 10% of training Fee to the Provider
The Provider Draws Down 90% of the funding from
the Skills Funding Agency
The Provider Pays for the End Point
Assessment and delvers the training
Example: Administration
Band £2,000
Employer Pays £200+VAT
Government Pays £1,800

14. What about non Levy payers?
Co-Investment
There are two types of employers
who will benefit from
government support towards the
cost of their apprenticeships
training:
• Employers who haven’t paid the
levy and want to purchase
apprenticeship training from a
provider
• A levy-paying employer who with
insufficient funds in their digital
account to pay for the cost of
training and assessment they want
to purchase
• The government will pay 90% of
the costs of training and
assessment.
• The employer will be responsible
for paying 10% of the costs.
Government
90%
Employer
10%

15. Purchasing Training - Summary

16. We will allocate each individual framework pathway to:
• the nearest funding band based on the current rate of funding the government
pays providers for training adult apprentices but with some extra support…
Funding bands for frameworks
16
16-18 uplift
• Transitional support of 20% of funding band
maximum paid directly to training providers
• Also applies to 19-24 year olds formerly in care
or have Education and Health Care plan
STEM Support
Additional support in
areas of disadvantage
• For all STEM framework pathways we will increase
the current government-funded adult rate by 40% at
Level 2 and 80% at Level 3 and above, and then
allocate these frameworks to the nearest funding
band.
Training providers receive:
• An additional £600 for training an apprentice
from top 10% of deprived areas, £300 for next
10% range and £200 for the next 7% range

17. Apprenticeship standards are employer-designed and offer employers and apprentices a
more robust and relevant training experience.
Recognised in the funding system by allocating higher funding bands to apprenticeship
standards, relative to equivalent frameworks, where appropriate.
Funding bands for standards
Principles
•Lower cost standards should be allocated to the nearest funding band
•Those standards currently assigned to the widest and highest cost funding band will be allocated to a new
band within this range. Taking into account:
•Actual prices employers have negotiated with providers.
•Evidence from Trailblazer employers on the estimated costs eligible apprenticeship training
•The funding bands set for equivalent frameworks
•The level and nature of the training, and consistency across similar types of apprenticeship standard.
Existing apprenticeship standards have been allocated to new funding bands according to
the following principles:

18. 16-18 year olds
Government will pay £1,000 to employers,
and a further £1,000 to training providers if
they train a 16-18 year old apprentice
Disadvantaged young people
Government will pay £1,000 to employers,
and a further £1,000 to training providers if
they train 19-24 year olds leaving care or who
have a Local Authority Education and
Healthcare plan
Additional learning support
We will pay training providers up to £150 a
month to support these learners, plus
additional costs based on evidenced need
English and Maths training
To meet minimum standards of English and
maths we will pay training providers £471 for
each of these qualifications (Level 1 and 2)
Small Employers
Employers with fewer than 50 employees will
have 100% of the training and assessment costs
covered when training a 16-18 year old (or 19-24
year old formerly in care or has a Local Authority
Education, Health and Care plan
Additional Support

19. Prior Qualifications
Now and in the future, you can train any
individual to undertake an apprenticeship at a
higher level than a qualification they already
hold.
From May 2017, an individual can be funded
to undertake an apprenticeship at the same
or lower level to acquire substantive new
skills
Cross-border funding
Applying a single test for funding through the
English system: based on whether the
apprentice’s main place of employment is
England.
‘Workplace’ is where the apprentice is
expected to spend the majority of their time
during their apprenticeship.
Transferring funding
During 2018 the Government will introduce
means for employers to transfer up to 10% of
the levy funds to another employer with a
digital account, or to an ATA.
New employer steering group to design this
system so that it meets their needs
Funding rules

20. Contracts
• Once a provider has been selected by an
employer to deliver training to their
apprentices, they will need to negotiate costs
ensuring contracts are in place so that the
funding can flow.
• The costs for end point assessments will be
included in the total price for the
apprenticeship agreed with the employer.
• Providers will be required to pass this
agreed amount on to the assessment
organisation selected by the employer.

21. Working with levy-paying employers
Employer A
Employer B
(C.D.E . . . )
Subcontractor
if Selected
Skills
Funding
Agency
End-point
assessment
organisation
(standards only)
Provider
All providers need to be listed on the
Register of Apprenticeship Training Providers
Contract
for Service
Contract
for Service
Contract
for Service
Contract for
Payment
Provider
Agreement
Apprenticeships – employer A
Apprenticeships – employer B (C,
D, E…)

22. Funding Comparison
The Hard Facts
Please note:
• Disadvantage uplifts have been protected and range from £200 - £600 for those qualifying
• Extra 20 per cent of funding band limit for 16-18 year-olds (in addition to the £1,000 provider and
£1,000 employer incentive)
For 16-18 year olds the position is worse however, this is offset by
Employer and Training Providers each being paid £1,000 in the form
off an age grant for this group (SMEs Only) . (Although we can not confirm all
the eligibility criteria at this stage)
Business Administration Level 2
How it is Now Post April 2017
English £475.98 £471.00
Maths £475.98 £471.00
Diploma in Administration £2,618.56 £2,000.00
Uplift (Average) £357.05 £0.00
Drawdown £3,927.57 £2,942.00
Loss of Funding £985.57
Income Reduction 25%
Awarding Body Fee -£175.00 -£150.00
End Point Assessment £400.00
Left for Delivery of Training £4,102.57 £2,692.00
Loss of Funding Going into Training £1,410.57
Drop in Funding Available for
Training (average)
34%
Customer Service Level 2
How it is Now Post April 2017
English £475.98 £471.00
Maths £475.98 £471.00
Diploma in Customer Service £2,203.72 £1,500.00
Uplift (Average) £315.57 £.00
Drawdown £3,471.25 £2,442.00
Loss of Funding £1,029.25
Income Reduction 30%
Awarding Body Fee -£175.00 -£150.00
End Point Assessment £300.00
Left for Delivery of Training £3,646.25 £2,292.00
Loss of Funding Going into Training £1,354.25
Drop in Funding Available for
Training (average)
37%

23. Current Position
Employer AGE Grants
Current Position
• AGE Grants
• Apprenticeship grant for employers of 16 to 24 year olds £1,500
• However,
• Employer have to employ fewer that 50 employees
• Is issued on a first-come, first-served basis within a training
organisation’s allocation of Grants
• You can only claim up to 5 Grants during the time the Grant is
available.
• commit to employ your apprentice(s) for a minimum of 12
months on the apprenticeship programme or the time it takes
them to complete their apprenticeship, whichever is the greater

24. Current Position
Employer AGE Grants
Current Position
• AGE Grants
• Apprenticeship grant for employers of 16 to 24 year olds £1,500
under the new scheme this will be reduced to £1,000 although
and additional £1000 will go to the training organisation
• However,
• Employer have to employ fewer that 50 employees
• Is issued on a first-come, first-served basis within a training
organisation’s allocation of Grants
• You can only claim up to 5 Grants during the time the Grant is
available.
• commit to employ your apprentice(s) for a minimum of 12
months on the apprenticeship programme or the time it takes
them to complete their apprenticeship, whichever is the greater

25. Current Position
Employer Grants
Local Schemes
• Many Councils including London offer incentives to
employers an example is Birmingham City Council
• £1,500 for recruiting in to an apprenticeship vacancy for
SME’s
• Learners must be
• 16 to 18 years old and not in employment, education
or training (NEET) (self declared): or
• 18 to 24 years old unemployed for at least 1 day (self
declared).
• Many other areas offer incentives and you should ask your
provider or local council for more information

27. 27
What is the digital apprenticeship service?
National Apprenticeship Service

31. Recruit an
apprentice

35. gateway.gov.uk

43. October 2016
• Publish funding bands that apply in the new system
• Full set of technical rules that underpin the funding system
• Calculation for English proportion
• Pilot testing with employers
• Register of Apprenticeship Training Providers open
November 2016
December 2016
• Further employer guidance from HMRC on how to calculate and pay the
apprenticeship levy
January 2017 • Employers to register on the digital apprenticeship service
February 2017
March 20017 • National Apprenticeship Week (6 to 10 March)
April 2017 • Levy paid
May 2017
• Service live
• Make levy commitments
To 2020 • All employers to use the service
Key milestones 2016 - 2017 and on

44. Summary
• Final funding levels announced
• Subcontracting saved in final apprenticeship plans
• Maths and English attract £471 each
• Disadvantage Uplifts protected in the short to
medium term
• Additional learning support for training providers up
to £150 a month
• Individuals can be funded to undertake an
apprenticeship at the same or lower level to acquire
substantive new skills

45. Keep In Touch
Join our Apprenticeship Funding Forum for further information open to
all Employer, Training Providers and others involved in the
Apprenticeship Levy
https://www.linkedin.com/groups/8551387

46. Keep In Touch
Contact us
https://uk.linkedin.com/in/safaraz
https://www.linkedin.com/company/pathwaygroup
https://www.facebook.com/pathwaygroup/
@pathwaygroup @SafarazAli
https://uk.linkedin.com/in/eddiecottis
@eddie_pathway
Safaraz Ali
Eddie Cottis