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Apprentice Funding Reform Consultation The Government has indicated that it intends to significantly change the way Apprentices are currently funded for their training and assessment. The proposed changes remove much of the responsibility from the training provider and places this upon you the employer. The changes are intended to give greater purchasing power and control to the employer but along with that control, greater responsibility and accountability. From 2016 Government funding will be routed to you the employer, we do not yet know the impact on funding rates and the maximum Government contribution, you will however, have to pay a mandatory financial contribution toward the cost of training. We are concerned that these actions will affect the ability of employers to recruit and train Apprentices, add significant administrtive burden upon the employer, whilst damaging training providers and Apprentices by introducing confusion to the system. The Government recently opened a consultation on the proposed changes and recognises that employers are the best people to judge and comment on these changes; we are therefore encouraging employers to make their opinions heard, before the opportunity closes on the 1st May. This may be your only chance to influence the funding reform process. How is the Government planning to administer these changes? The Governments financial contribution will be via the existing PAYE process or an Apprenticeship Credit via an online account for the employer - you and the Government will pay in your contributions and from this you can buy training and assessment from approved training providers. A contract between you and the training provider will be required to confirm what is being purchased, timeframes, payments etc. The online employer account will allow the Government to monitor payments from the employer to the training provider, check financial balances and learner progress. The employer will need to keep the online account up to date. Employers who outsource their payroll function may incur additional cost or extra administration in operating the system. Recognising that 16 and 17 year olds often require more supervision when new to a role, the employer will receive an additional “one off� payment or credit, once the apprentice has settled into their learning in the workplace. This needs to be balanced with the new requirement for employers to pay a mandatory % of the cost of training for 16 and 17 year olds. What happens with the funding currently? Currently the funding is paid directly to your approved training provider; you are likely not involved in this process. It is also likely that you are not currently contributing to the financial cost of the training. The Government funding pays the training provider to assist you in: -

Recruiting and vetting new apprentices Conducting initial assessment and job match suitability Registering and certificating your Apprentice


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Delivering the Apprenticeship training Delivering or arranging technical theory, maths and English Completing all of the required paperwork


How will the proposed funding reform affect you and your business? -

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You will have greater control over which training provider you select and also the price that you pay for training You will pay a mandatory % of the training costs (all ages), we do not yet know what that % will be (potentially be up to 50%). The Government will contribute the rest (up to a maximum). The cost of training varies between £2k and £20k you will need to pay a mandatory % of the training costs for 16 and 17 year old Apprentices You will need to contract with an approved training provider or training providers to deliver the NVQ, technical certificate, maths and English You will need to contract separately and pay for end assessment delivery which must be independent You become responsible for some of the administration via a new Government website including: assessing eligibility, registering the apprentice and recording their start and assessment outcomes You become responsible for making contract payments to the training provider You may pay out more than you receive from the Government if the Apprentice does not complete their programme

Your views are required: In an earlier consultation, the government only received 80 responses from employers nationally – this is not enough. It is our strong belief that the Government needs to hear more views from employers to make an informed decision. Some employers will see the changes as progressive, other may be concerned about the additional level of responsibility placed upon them. The current government consultation closes on the 1st May. We kindly request your assistance as one of our valued employers, in the completion of the accompanying Response form. The Response Form contains 23 pre set questions (some have part A & B etc) Answers are multiple choice or short sentence responses. Additionally in regard to question 23) We are also seeking your comments to the following five questions, from which we seek your approval to compile into a Provider Network regional response to the consultation. (Answers will be completely anonymous –showing only size of employer and sector) 1) Will the proposed changes increase or reduce the number of Apprentices that your business recruits? 2) Are the proposed changes including the proposed changes in funding an improvement on the existing arrangements? 3) Do you believe that the Government contribution to the cost of training an Apprentice should be the same regardless of age? 4) This is the last of a series of consultations on the future of Apprenticeships. Were you aware of and did you respond to the earlier consultations? 5) Does your business have the knowledge and skills to be able to negotiate the price and quality of training and assessment with a training provider? The full consultation document and response form is available: https://www.gov.uk/government/consultations/apprenticeship-funding-reform-in-englandpayment-mechanisms-and-funding-principles


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