The Liverpool City Region Combined Authority has been given devolved funding from the national Apprenticeships Grant for Employers (AGE) scheme to provide grants from the 1st August to the 31st December 2016 to employers who recruit apprentices.
On 5th July GMLPF partnered with the Combined Authority to announce the LCR Apprenticeship Grant for Employers.
Because the scheme has been devolved, it allows the City Region to set its own level of grant funding along with its own eligibility criteria.
This scheme will be introduced from the 1st August 2016, and effectively replaces the national scheme as the only grant available to LCR based employers from this time. Any employer after this time put forward for the £1500 national grant will automatically rejected.
Key points to note:
- LCR grants have been enhanced from £1500 available nationally to a minimum of £2500 and a maximum of £4000 depending on the age of the apprentice and the level of the apprenticeship being undertaken
- LCR Grants are available to employers who employ up to 249 employees (national scheme = 50 employees)
- LCR grants available to employers who have not recruited an apprentice for the past 6 months (national scheme = 12 months)
- LCR Combined Authority are asking Apprenticeship providers to complete a Provider Expectiona proforma indicating how many grant payments they are likely to claim between August and December 2016
- Powerpoint presentation from launch event 5/7/16: details of grant including revised and enhanced eligibility requirements
- Employer information flyer: for promoting grant to employer
- LCR Combined Authority website: link to updated information on grant and access to provider guidance pack
- LCR AGE Provider Guidance
- LCR AGE Employer and Provider claim pack
- LCR AGE Provider Expectation proforma
Any questions of queries relating to the grant should be directed to firstname.lastname@example.org
I will of course be more than happy to field any questions from GMLPF members
Gareth Jones, GMLPF’s Apprenticeship Strategy Manager, summarises the key updates from BIS on the Apprenticeship Levy. Gareth’s report highlights updates to the conditions that apply to Levy-paying employers and the introduction of conditions for non Levy-paying employers.
We strongly advise GMLPF members to start having conversations with their employers, if they haven’t already, regardless of whether they will be paying the Levy or not.
Levy- paying employers
- The £15,000 Apprenticeship Levy Allowance will be operated on monthly basis (£1250 per month), with any unused allowance rolling over to the next month
- It’s is the employer’s responsibility to – calculate whether they have to pay the Levy – make arrangements to pay it alongside their PAYE bill every month
- Levy-paying employers will be able to register for an online account with the Digital Apprenticeship Service (DAS) from January 2017. 7. As expected, only Levy-paying employers will have access to DAS from April 2017. All other employers are expected to be using DAS by 2020.
- Levy contributions will appear in online accounts a few days after payment is made to HMRC. So employers can expect to see their payments showing in their DAS accounts from late May 2017
- The Government will provide a 10% top-up to an employer’s Levy contributions will be applied at the same time the employer’s money is credited into DAS accounts. For every £1 an employer pays into the Levy they will receive £1.10
- Levy contributions will expire 18 months after the contribution was made. Originally it was assumed they would expire after 2 years
- During the first year of operation, employers are only permitted to spend the Levy on their own staff.
- Apprenticeships which start before April 2017 will be funded in line with current models i.e. Frameworks or Trailblazer Standard funding models
- Employers don’t have to wait until they have enough funds in their DAS account to cover the full cost of an Apprenticeship before a member of staff starts training. Having enough funds to cover the skills provider’s charges for the first month’s training is sufficient.
- Payments to skills providers will be made monthly via the DAS
- Extra support will be available for employers who recruit 16-18 year olds (an incentive payment). This will be paid via their skills provider.
- Apprentices with additional needs are eligible for extra support which is funded through direct payment to their skills provider. It is expected that the provider will be responsible for identifying the additional needs and arranging funding directly with Government.
- Funding for English and Maths will be paid directly to the provider by the Government
For non Levy-paying employers
- From April 2017, all non-levy paying employers will be required to “co-invest’ in training, i.e. agree a price with a provider and then pay towards the cost of the training
- Employers will make a contribution to the cost of this training. The Government will pay the balance, up to the maximum amount of funding available for that Apprenticeship.
- Employers will pay their contribution directly to the skills provider and will be able to spread payments over the life time of the Apprenticeship. The Government will pay the balance directly to the provider
- Employers can only use approved skills providers for Apprenticeships training. There is not yet any definitive information about what an approved provider is, or the registration process.
Further information will be released in June, October and then finally in December 2016.
It’s worth noting that whilst the majority of GMLPF’s employers will not be subject to the Levy, the risk is that the introduction of co-investing means they might be put off taking on apprentices. But this scenario is counterbalanced by the view that there are few worthwhile alternatives for employers wanting to develop their workforce. And financial incentives may prove enough to keep these employers on board. The simple fact is that we don’t know how things will turn out. We can make predictions but the rules continue to be tweaked. All we can do is continue to keep up with the latest Government updates and scenario plan for potential outcomes.
GMLPF Apprenticeships Strategy Manager
For more information, please download the slides: Apprenticeship Levy Update
Comments from James Glendenning, CEO of GMLPF
On 13th January 2015, the Government issued the long-awaited but brief statement from Nick Boles regarding the findings of the Apprenticeships Funding Reform Consultation which ran from 6 March to 1 May 2014. It is clear that the Government remains committed to giving employers direct control of apprenticeship funding but consultation feedback has led them to conclude that “further detailed design work is needed” before deciding on a funding mechanism.
So in terms of being able to plan for the future landscape of Apprenticeships, we are no further on than we were 8 months ago. However, it is reassuring to know that the Government is pausing to consider our collective feedback, and as I understand it, use it to inform and shape their final decisions.
The key points we have noted from the Summary of Responses are as follows:
- 75% of respondents felt the reforms could have an adverse impact on employers’ involvement with apprenticeships
- No reference to the exclusion of the provider payment model which featured as “Option 3” in the original consultation of July 2013, other than to point out that it was the preferred option for half the respondents to that first consultation.
- There was a significant increase in the number of responses from employers from 22% in the last consultation, to 67% in this one.
- Smaller employers were more critical of funding reform principles. The report states that this was influenced by unavailability of information regarding funding levels. Most of the concerns centred on the administrative and financial burden the reforms might bring. Larger employers voiced support for employer control.
- Employers feel that they already cover indirect costs of training apprentices through wages and in-house support and feel this should be taken into account when considering co-investment
- 18% of respondents were concerned about employers’ ability to negotiate prices for training. They also feel there is a lack of capability to identify good and appropriate training
- There were concerns that the payment by results model will discourage employers from taking on apprentices with additional support needs.
- Consensus from respondents that there is a need for clarity and accessibility of information on employer website to help them register apprentices and check eligibility. 47% prioritise publishing of costs of training and funding levels on the website. 22% said the website should support identification of training providers, and 10% that it should provide information on provider quality.
- 68% said the PAYE model would adversely affect cash flow; larger companies however felt cash flow would be manageable. The Apprenticeship Credit model was perceived as less problematic but there were still concerns.
33% highlighted taking provider quality into account when drawing up a register of providers. 27% stated the importance of provider track record and success rates, whilst 15% prioritised Ofsted ratings.
- 48% of respondents feel a “sector readiness programme” is a necessity for employers, and 10% felt this should be for providers too.
- There is broad support for an employer communication campaign, outlining changes and implications.
With the general election on the horizon, it seems unlikely that the current uncertainty regarding Apprenticeships Reform will be addressed before late 2015. Whilst it is encouraging that ministers are listening, it is vitally important that Government doesn’t hesitate for too long as businesses may be put off from investing in apprenticeships in the meantime.
It is worth reflecting on the figures for the number of respondents to the consultation. A total of 1459 responses were received, and of these, 955 were employers including 328 small businesses and 345 micro businesses. Joint efforts between GMLPF, NWPN and other North West provider networks resulted in a total of 456 employers submitting individual responses to the consultation, which equates to almost half of the total employer responses received. 172 of these were from Merseyside businesses, nearly 20% of the total number of employer responses received by the Government. This is indicative of the impact a coordinated approach can have and I would like to thank all the GMLPF members who took the time to encourage their employers to respond to the consultation.
Nick Boles confirms that future work on the reforms will be undertaken in an “open and collaborative way”. The Government’s clear commitment to maintaining ongoing dialogue with employers and providers is I feel, a direct result of us and others rallying responses to the consultation, and certainly something to be pleased about.
If anyone has any thoughts, please feel free to email me or post them below.