An apprenticeship is a tri-party agreement between an individual, an employer and a training provider, that involves on-the-job and off-the-job training that leads to a nationally recognised qualification. Apprenticeships can be offered to new and existing employees and are designed by the Sector Skills Council. Apprenticeships ensure that your workforce has the practical skills and qualifications that you need in place now and in the future. The mixture of on and off job learning ensures they learn the skills that work best for your business.
Apprentices should be engaged on an apprenticeship agreement but they are deemed to be an employee. So their terms and conditions should be the same as the terms you would offer any employee, with the exception of their rate of pay. You must also have a commitment statement in place with each apprentice as this sets out what obligations each of the three parties must meet.
The Gov.uk website has some useful information – https://www.gov.uk/topic/further-education-skills/apprenticeships
Apprenticeships Accelerator Programme
The LGA has secured funding from ESFA to run the Apprenticeships Accelerator Programme. A pilot phase will run from October 2018 to February 2019 providing up to 25 councils with five days of workforce development support. Following an evaluation process, a second phase is expected to launch in spring 2019. Find out more about the LGA’s apprenticeship work.
Part Time Employees
It is a common misconception that someone undertaking an apprenticeship must be employed for at least 30 hours per week. In fact the only stipulation for undertaking an apprenticeship is that you are employed while undertaking the qualification. However, anyone contracted to work fewer than 30 hours a week will generally need to extend the duration of the apprenticeship in proportion to the proportion of the hours they work to the 30 hour minimum. So someone who works 15 hours a week undertaking an apprenticeship that would ordinarily take a year, would have the duration extended to two years.
A simple funding system for apprenticeship frameworks where each framework pathway is allocated to a single funding band means that regardless of the age of the apprentice, the employer will pay the same course fee to the training provider. These funding bands are based on the price of delivering an apprenticeship to an adult under the old scheme. This represents an increase in costs for those who have focused on training 16-18 year olds. In recognition of this additional cost each time they train a 16-18 year old the Government will pay an additional £1,000 to both the employer and the provider. To aid the transition to this new funding band approach further additional funding, worth up to 20% of the funding band maximum, is available to providers where they train a 16-18 year old. This is kept under review and will reduce over time. Similar levels of assistance will also be available to employers and providers who train 19 – 24 year olds who were previously in care or have an Education and Health Care Plan in place. Apprenticeships are either funded through the Apprenticeship Levy or directly from the employer through the co-investment route.
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Introduced in April 2017, the Apprenticeship Levy of 0.5% of pay bill applies to all employers. However, because every employer is given a £15,000 allowance to offset against their levy liability, in practice only those employers with an annual pay bill of over £3 million will pay the levy. So if your monthly pay bill is £250,000 your levy liability is £1,250 (0.5% of £250,000). This is the same as the allowance for the month (£15,000/12). Therefore, you will not pay any levy. If your monthly pay bill fluctuates above and below the £250,000 there may be months where you will have a levy liability. However, because the allowance is an annual allowance, any allowance you don’t use in a month can be carried over to the next month. Each Levy payment is due at the time you run payroll and submit your Real Time Data submission to HMRC. The Levy Funds you pay in are deposited into a Digital Account the month after they are paid to HMRC. So the Levy paid on your April payroll will not appear in your digital account until the end of May. In addition to your contribution, the Government will pay a 10% top-up contribution for each month you pay the levy. Funds in your digital account can be used to fund training and assessments on recognised apprenticeship courses. You can not use them to fund salaries. The apprentices can be any age and can be existing members of staff looking to gain qualification. Levy funds do have an expiration date of 24 months after the funds are paid into the levy account. It is a use it or lose it pot of money. If you want to spend more than you have in your digital account you can access the co-investment funding route for eligible apprenticeship training and assessment, whereby the Government pays 90% of the training and assessment costs.
Apprenticeship levy: new flexibilities
Following lobbying by the LGA, the government has announced a package of reforms to the Apprenticeship Levy including increasing the amount of Levy funds that can be transferred to another employer from 10 per cent to 25 per cent, and extra funding to speed up standards development. The change to the transfers policy will be effective from April 2019. Find out more and read the LGA response.
For employers who are not required to pay the Apprenticeship Levy or for those who pay the levy but have exhausted all their funds they can access co-investment funds. This means that for qualifying apprenticeships the government will fund up to 90% of the funding band price for the training and assessment with the remaining 10% balance being payable by the employer. For apprenticeships commencing after 1 April 2019 the co-investment funding provided by the Government increased to 95%, meaning that an employer only needs to fund 5% of the total apprenticeship cost.
In the government’s view the public sector should be leading the way in apprenticeships in order to reach the government target of 3 million new apprenticeships by 2020. Therefore, public sector employers paying the apprenticeship levy must work towards achieving a target of 2.3% of headcount in new apprenticeships each year. So if your headcount is 500 then your target is 11.5 new apprentices each year.
There was significant lobbying to try to get the government to move from a percentage of headcount to a percentage of FTE in recognition that local government has a significant proportion of part time or job share partner arrangements within its workforce. there was also an attempt to remove schools headcount from the calculation or at least have them reporting separately but to no avail.
Early indications in 2018 suggest that councils are achieving approximately 57% of their target. Schools are thought to be achieving only 18% of their target.
Apprenticeship target reporting
On 22 November 2018, the government published the first year’s worth of public sector target performance data, covering 2017/18. The spreadsheet includes data for all public sector organisations that submitted returns, including headcount, starts and progress towards the target, as well as aggregate data for the various sub-sectors of the public sector like local government, NHS and Police.
The numbers provided mixed news for local government. On the one hand, our numbers were up from the previous year. The LGA’s projection of 11,000 starts held firm, with 11,178 starts reported to government from the sector (up from our estimate of 6,000 starts taking place in the sector in 2016/17). We were the only part of the public sector to suffer a fall in headcount (down 5% year-on-year), yet still delivered a large increase in starts, something noted by the government in its data release. Despite the challenges this is an impressive performance and demonstrates local governments commitment to delivering more apprenticeship starts.
However, this obviously leaves us someway short of our overall target, and we were outperformed by other parts of the public sector. Local government as a whole achieved 0.9% of its headcount as apprenticeship starts in 17/18, against a public sector average of 1.4%. Almost all areas of the public sector failed to meet the target of 2.3%, save for the Armed Forces, who managed 9.1%. Local government also ran behind the civil service (1.3%) and NHS (1.2%) but was tied with the fire service (0.9%) and ran ahead of the Police Service (0.2%).
Although they can’t provide definitive numbers as they did not collect this data separately, the government has been able to estimate that 6,300 apprenticeship starts took place in schools in 17/18. Around half of these starts took place in maintained schools (included within the overall numbers reported for local government above).
Data was also published for each individual public sector body on their own performance towards meeting the target. 34 local authorities, plus the GLA and the GMCA (n.b. the body itself rather than the 10 LAs, which reported separately) met or exceeded their public sector target in 17/18, and a further 13 achieved over 2% and just missed out.
Off the Job Training
An employee undertaking an apprenticeship must undertake 20% of their working time as ‘off the job training’ (OTJT). This is 20% of their actual contractual hours. So a person contracted to work:
- 30 hours must undertake 6 hours OTJT
- 35 hours must undertake 7 hours OTJT
In the early stages of apprenticeships they were designed with the ‘day release’ approach in mind. However, modern apprenticeships don’t require the OTJT to be in a class room or out of the workplace. Instead, employers are actively encouraged to think creatively and use this ‘off the job’ time for activities that will add value to the organisation while giving the apprentice valuable learning opportunities.
Some examples of activities that you could consider include:
- undertake special project linked to the learning objectives of the apprenticeship,
- shadow a colleague,
- work with a coach or mentor,
- attend a conference,
- on-line learning,
- industry visits to other organisations to understand how they work,
- visits to other departments within the organisation to understand how the business works,
- completing written material, such as workbooks, which are provided by the training partner,
- preparation for a professional discussion,
- gathering evidence for a learning/professional portfolio or reflective discussion, or
- participation in simulation exercises.
First year of the apprenticeship levy
A new report by the think tank Reform reviews the first year of the apprenticeship levy, looking at whether it has incentivised more employers to provide quality apprenticeships and secured more opportunities for young people. The report observes that the number of people starting an apprenticeship in the first six months fell by 40 per cent compared to the same period in the previous year. In addition, more experienced and older workers are increasingly becoming the focus of the apprenticeship programme, at the expense of less experienced and younger employees. It also argues that the introduction of the levy has also diminished the quality of apprenticeships. The report sets out a number of recommendations to improve the levy.
The KHub from the LGA
The KHub is the place to find all of our information and best practice as well as to engage in discussions with colleagues from across the country. If you’ve not yet joined, please first register using the following link https://khub.net/sign-up. Once you have registered, please email Sadique.email@example.com to be invited into the apprenticeship levy group. The direct link to our group is https://khub.net/group/apprenticeship-levy-group-2016-2020/group-home. Please note, membership requests from schools and academies are not currently being approved. If your Council is set-up as shared/outsourced service please provide your .gov email address.