You need skilled employees; young people need improved skills and knowledge; and the Government is prepared to part-fund their apprenticeship training. What’s not to like about offering an apprenticeship to a new hire or an employee? Paul Healy tells us how organisations can benefit from apprenticeship training.
Apprenticeships are changing
The UK Government has ambitious plans for apprenticeships.
In 2015 the government promised;
- to support 3 million apprenticeship starts by 2020
- to change the law so that apprenticeships had the same legal treatment as degrees
- to set apprentice employment targets in the Public Sector and for companies tendering for public contracts.
This is all about restructuring and rebranding the apprenticeship route into a career path equivalent to higher education. It’s off to a good start: in 2015, 537,900 people started apprenticeships across the UK, surpassing the 532,300 entering Higher Education.
Indeed, we have come through an era where the height of aspiration to gain a third level education is waning. With over half of UK employers claiming that almost all graduate recruits enter the workforce without the vital attributes needed to do the job, and the cost of a degree in England rising to £9,000 a year, job-specific training is increasingly an option both for employers and young people.
Let’s dispel a myth from the outset. The traditional notion of an apprentice as an oil-covered 18-year-old male mechanic in overalls could not be farther from the truth.
In fact, the majority of apprenticeship starts are in the service sectors. Almost three quarters (71%) of all starts in 2015 were concentrated in three sectors: Business, Administration & Law; Health, Public Services & Care; and Retail & Commercial Enterprise. And the larger proportion of apprenticeship starts are women (53%), a consistent statistic for the past five years.
The Apprenticeship, Skills, Children and Learning Act (2009), and amendments to the Enterprise Act (2016) set clear guidelines on the quality, status, and governance of the modern-day apprenticeship.
At the apex of the governance sits the Institute for Apprenticeships (IfA), responsible for setting standards and advising on funding. This is a public body sponsored by the Department of Education and chaired by Antony Jenkins.
Fully operational in 2017, the IfA so far has set up 15 Route Panels responsible for setting the standards for knowledge and skills for as many occupations as possible.
The first panels are:
- Agriculture, environment and animal care
- Business and administrative
- Catering and hospitality
- Childcare and education
- Creative and design
- Engineering and manufacture
- Hair and beauty
- Health and science
- Legal, finance and accounting
- Protective Services
- Sales, marketing and procurement
- Social care
- Transport and logistics
The Route Panels will be playing catch-up, as the momentum to create Apprenticeship Standards began in 2014, and has built steadily, with many Standards already developed and others pending. This work has been led by Trailblazers, employer-led groups who jumped at the opportunity to set the standards for roles in their industries.
To be established as a Trailblazer, a group of no less than ten employers had to apply to the former Department of Business, Innovation and Skills, (this responsibility has now passed to the IoA), they were vetted and assessed, then given guidance on how to create an Apprenticeship Standard, and set to work.
The Apprenticeship Standards replace the Apprenticeship Frameworks which were less role-focussed and inconsistent from one Framework to the next. Frameworks are to be phased out over the next few years.
The intention is that Standards be role-specific so that once an apprentice completes one they will be a fully productive employee. As of April 2019, there are currently 672 apprenticeship standards with 413 approved for delivery (you can find a list of employers setting standards in your industry here and a list of Approved Standards here).
Converting apprenticeship training to mainstream school grading
While quality and consistency have been an important part of the Standards creation process it has also been critical to the rebranding of the Apprenticeship system that their equivalence to formal educational qualifications is recognized and strengthened.
There are nine recognised education levels, graded Entry Level, and then Level 1 – 8. Each covers a wide range of qualifications, but generally get benchmarked against the mainstream school grading system in this way:Level 1 = GCSE Grade D or below
Level 2 =GCSE Grade C or higher
Level 3 = A Level Grades A to E
Level 4 = Higher National Certificate (HNC)Level 5 = Higher National Diploma (HND)
Level 6 = Honours Degree
Level 7 = Masters Degree
Level 8 = Doctorate (PhD, DPhil)Apprenticeship Standards have been banded into four layers and mapped to the formal education system in this way:Intermediate – Level 2
Advanced – Level 3Higher – Levels 4,5,6,7
Degree – Level 6 and 7In 2015/16 the highest number of apprenticeship starts was at Intermediate Level (57%), followed by Advanced (38%), and then Higher (5%). Intermediate Level is a decreasing share of all starts falling from 60% in 2014.
An apprenticeship is a paid role, not an unpaid internship. An apprentice aged under 19, or over 19 and in the first year of an apprenticeship is entitled to the Apprentice Rate of the National Minimum Wage, (currently £3.50/hour).
Anyone over 25 years of age is entitled to the National Living Wage (currently £7.50/hour). All others are entitled to the Standard Minimum Wage rated by age (currently up to £7.05/hour).
This is the employer’s responsibility; the Government is prepared to assist with training though.
The new apprenticeship levy
Since 1 May 2017, a new funding system for apprenticeships is in place. Essentially, each Apprentice Framework and Standard is rated into one of 15 bands, defining the amounts the Government is prepared to pay. These bands have upper but no lower limits, to encourage employers and training providers to negotiate prices downwards.
To part-fund this commitment, a new Apprenticeship Levy came into force in April 2017 for companies with a payroll greater than £3 million per year; set at 0.5% of payroll.
For companies swept up in the Levy, there is a sweetener – you can spend the Levy on your own apprentices’ training. Each levied employer is given a digital account showing the tax levied against them, and they are given 24 months to spend that money on apprenticeship training before the government claws it back into general taxation.
For companies beneath the £3 million payroll threshold, and for enlightened Levied companies that want to spend more than what lies resting in their digital account, the Government has come up with a system of co-investment, where it will pay 95% of the apprenticeship training cost and the employer will “co-invest” the other 5%.
Initially the employer will pay the co-investment portion directly to the training provider, but eventually, they will be able to top up their digital accounts.
That’s the short version, for more information on how the system works go here.
To maintain quality standards, employers must spend apprenticeship training budget with approved training providers. A rolling approvals process has been underway since late 2016 to create a Register of Approved Training Providers (RoATP).
This process got off to a shaky start with the first call having to be reopened, and no sign that the Education and Skills Funding Agency is going to keep to its goal of reopening the register every quarter for new entrants, but hopefully, these are only teething problems.
A second register, of agencies who can administer apprenticeships and even employ apprentices on an employer’s behalf, is currently being established and should be available later in the year (the RoATA).
So is the Apprenticeship route right for you, or your company?
Here’s what you can do now to determine if you can make the most out of these new changes.
- The place to begin is to find out if there is a Framework or Standard in place for the role you have in mind.
- Now find an organization that offers the training for that Standard.
- Check what funding is available. Read our page on how this works, or check the Government website here.
- Advertise your role; typically your training provider can do it for you. The Government operates a national database of available apprenticeships.
- Enter into an Apprenticeship Agreement and make a Commitment Statement with your new hire.