The post 16 sector continues to be in a period of significant and continual change.
For example, this month finds the finalisation of the qualifications which will attract government funding and will include a significant reduction in the number and type of qualifications. The Skills Funding Agency (SFA) is proposing to no longer fund some 500 plus full level 2 and 3 qualifications, which is approximately 20 percent of the current available qualifications. The affected qualifications are mainly targeted at those aged 19+.
There have been other major changes and as reported in my last column the changes to apprenticeships and in particular the new employer level.
The provision undergoing the greatest transformation is undoubtedly that of apprenticeships. A huge reformation process is underway which includes closing down current frameworks to make way for the new apprenticeships frameworks called Trailblazer Apprenticeships. It is expected that this will take place over the current course of the current Parliament.
Whilst apprenticeships are being heavily promoted as a serious option for study, post 16 there is still a lack of information permeating through to young people aged 14 plus on options and the value and importance of apprenticeships, in particular some misconceptions about levels of pay, qualifications and other benefits.
Harrogate College along with other local training providers can provide detailed information and guidance for any student or parent who would like to discuss available options and help to dispel some of the myths which seem to persist about apprenticeships. Employers are of course, key to successful apprenticeship provision and changes are being made to the role of the employer in training. Not least through the introduction of the Employer Levy which comes into effect from April 2017.
This will impact on employers with a wage bill of more than £3m who will have to pay a 0.5 percent levy to allow for apprenticeship training costs. The broad aim is to raise £3 billion a year to meet the government’s target of 3million new apprenticeships by 2020 and will affect 2% of all UK businesses.
An example of what this would mean to an employer of 250 staff with an annual payroll of £5m would pay circa £25,000 into the levy. In return for this contribution there will be a £15,000 one off allowance to offset payment of the levy. Furthermore there will be incentive payments which will be aimed at supporting the recruitment of 16-18 year olds recruited to the new Apprenticeship Trailblazer standards. Employers will be able to spend the levy through the proposed government online portal known as the ‘Digital Apprenticeship Service’ which will be accessible to all organisations. The portal will allow employers to ‘shop’ for all apprenticeship training providers, including local colleges and training providers and once determining who they want to provide the training will pay using the digital voucher. As previously mentioned the current apprenticeship frameworks will gradually be replaced by ‘Trailblazer’ standards and from 2017 the new ‘Institute of Apprenticeships’ will co-ordinate all apprenticeship standards. The institute will also oversee the quality of the new frameworks.
There are still some aspects which require clarification and it is expected that these will become clearer over the next few months, however questions such as how compliance will be monitored, how the PAYE mechanism will be used to collect the levy. There are also fears that some companies that have little or no backroom office capacity to manage the digital voucher system, used to purchase training may simply stop recruiting apprentices. It may also have a wider impact on the general training budgets as some employers may choose to offset their existing training budgets to pay the levy. There is also a possibility that more businesses may decide to outsource many of their services and staff to keep ‘pay’ below the levy quota.
So what does this mean for traditional training providers such as Harrogate College and other providers? It is considered that where colleges have enjoyed a good apprenticeship delivery and training relationship with employers previously this will continue as it is the colleges who have the infrastructure to provide the administration solution and support for the requirements of the digital voucher system which will be a free service for employers. Those colleges and training providers who have an Ofsted grading judgement of grade 2 good and above will give employers a level of confidence and will be well placed to provide high quality English and maths training which will be an essential requirement of all apprenticeships. They will also be able to provide an apprenticeship recruitment service and to provide support for training and supporting assessors.
I would like to thank Stephen Girking for his helpful insight into the employer levy. Steve is Director of Operations and Delivery of Commercial Services at HCUK Training which is the apprenticeship and work based learning part of Harrogate College. For further information or details on apprenticeships please visit the college website or contact the college.