APPRENTICESHIPS CORE BRIEF – June 2016
- POLICY OBJECTIVE
We are committed to reaching 3 million apprenticeship starts in England by 2020 and will ensure they deliver the skills employers and the economy need for growth.
- KEY MESSAGES
- Apprenticeships already benefit employers, apprentices and the economy. High quality apprenticeships are essential to support our employers and to help our economy to prosper in the years to come.
- The English Apprenticeships 2020 vision document outlines the Government’s plan to increase the quality and quantity of apprenticeships to reach commitment of 3 million apprenticeships by 2020.
- We are doubling the annual level of spending on apprenticeships between 2010-11 and 2019-20 in cash terms to £2.5bn, which will be funded by the new apprenticeship levy.
- Apprenticeships are full time paid jobs with training. The locations and sectors where apprenticeships are available are determined by employers choosing to offer apprenticeships and recruit apprentices.
- Employer-led apprenticeship reforms continue to improve the quality of apprenticeships for all, providing the skills that employers need.
- We will roll out many more Degree Apprenticeships, combining a high quality degree with an apprenticeship. Higher and Degree Apprenticeships are widening access to the professions and providing higher level technical skills employers need to improve productivity and giving young people an equally valid career route as going to university.
- Apprenticeships give young people the chance to reach their potential, giving them what it takes to achieve a successful career and secure finances in the years ahead.
- Apprenticeships are the best route to skilled employment for people of all ages and genders and can offer a real opportunity for women to re-enter the labour market, perhaps after having taken time out for whatever reason.
- We are taking action to support the growth of apprenticeships to meet our 3 million commitment – working with large and small businesses to begin or expand their programmes, setting new expectations for public sector bodies and through public procurement.
- The public sector will fully play a part in delivering more apprenticeships. The Enterprise Act will introduce legislation to enable Government to set targets for public bodies. 180 responses were received to the recent consultation which are currently being analysed. We will publish the Government Response in the near future.
- Measures proposed in the Enterprise Act will also protect the term ‘apprenticeship’ to prevent misuse by providers in England. Government Response.
- We have changed government procurement rules so that all relevant bids for central government contracts worth £10 million or more and lasting 12 months or more must demonstrate a clear commitment to apprenticeships.
- A UK-wide levy will be introduced in April 2017 for all employers in public and private sector with a pay bill of £3m or more, to help fund the increase in quantity and quality of apprenticeship training in England. As skills policy is a devolved area the Devolved Administrations will receive their fair share of the income from the levy, and continue to have complete flexibility over how to use it to support businesses in their territories. Employer guidance on the apprenticeship levy was published 21 April.
- Employers designing apprenticeship standards that are more responsive to the needs of business.
- Giving employers control of the funding so that they become more demanding customers.
- Increasing the quality of apprenticeships through more rigorous assessment and grading at the end of the apprenticeship.
- Over 150 Trailblazers involving more than 1300 employers with 231 standards published (of which over 60 are Higher and Degree Apprenticeships) and more than 150 new standards in development. The new apprenticeships are in a broad range of sectors from nuclear to fashion, law, banking and defence. There have been over 1,400 starts on new standards in occupations such as Software Developer and Aerospace Engineer.
- The first apprenticeship starts on the new standards began in September 2014.
- Approved standards and assessment plans along with details of standards in development are available at: gov.uk/government/collections/apprenticeship-standards.
- Guidance for employers on the standards development process is available at: https://www.gov.uk/government/publications/future-of-apprenticeships-in-england-guidance-for-trailblazers.
- In March 2016 we began the phased withdrawal of SASE frameworks. The first batch of 7 frameworks closed to new starts from 1 June 2016. We envisage a migration of frameworks to standards over the course of the Parliament, with as much of this to take place by 2017/18 as possible. Details of the first batch can be found at: Removal of apprenticeship frameworks
Giving employers control over funding for apprenticeships continues to be an essential feature of our reform programme. 2016-17 is a transitional year before the apprenticeship levy comes into effect. We will continue the funding pilot for standards, where government pays £2 for every £1 an employer invests, alongside the existing approach to funding framework based apprenticeships. This will be the last year in which government funding for apprenticeships is largely grant funded. From April 2017, apprenticeships will be funded from the apprenticeship levy and we will work closely with employers on the details of its design. The outline of the funding model from April 2017 was published in the Employer Guide in April, bringing frameworks and standards on to a common funding approach. Details of provisional funding rates for co-investment, funding bands and incentives will be published at the end of June.
- KEY DATA
We are committed to reaching 3 million apprenticeship starts in England by 2020. There were 2.4 million apprenticeship starts over the previous Parliament. The following table show apprenticeship starts by Age and Level from 2010/11 to 2014/15 and 2015/16 reported to date.
There were 499,900 apprenticeship starts in the 2014/15 academic year of which 125,900 were under 19.
All age government funded Apprenticeship participation increased to 871,800 in the 2014/15 academic year, up 2.4 per cent on 2013/14 and the highest number on record.
Apprenticeship Starts by Level and Age, 2010/11 to 2014/15 and 2015/16 (Aug-Jan reported to date)
|2012/13||2013/14||2014/15||% Change 2010/11 to 2014/15||% Change 2013/14 to 2014/15||2015/16 Aug-Jan|
|Starts||(Reported to Date)|
|Intermediate (Level 2)||301,100||292,800||286,500||298,300||-0.9%||4.1%||144,200|
|Advanced (Level 3)||153,900||207,700||144,700||181,800||18.1%||25.6%||95,800|
|Higher (Level 4+)||2,200||9,800||9,200||19,800||Over 500%||114.5%||11,100|
|of which 19+||325,500||395,700||320,700||374,000||14.9%||16.6%||166,900|
- 53.0% of all apprenticeship starts in 2014/15 were females 52.9% in 2013/14.
- 10.6% of those starting an Apprenticeship in 2014/15 had a BAME background
- In 2014/15, 44,090 of those starting an apprenticeship declared a disability or learning difficulty (LDD). This is 8.8% of the total starts.
LINKS TO FURTHER DATA
Statistical First Release 23 March: https://www.gov.uk/government/statistics/learner-participation-outcomes-and-level-of-highest-qualification-held
Starts by geography (region, constituency and Local Authority): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477737/apprenticeships-starts-by-geography-learner-demographics-and-sector-subject-area.xls
BENEFITS OF APPRENTICESHIPS
- Apprentices – The lifetime benefits associated with the acquisition of apprenticeships at Level 2 and 3 are very significant, standing at between £48,000 and £74,000 for Level 2 and between £77,000 and £117,000 for Level 3 Apprenticeships. Higher apprentices could earn £150,000 more on average over their lifetime compared to those with L3 vocational qualifications. 89% of apprentices are satisfied with their apprenticeship; 97% of apprentices said their ability to do the job had improved, and 92% of apprentices said their career prospects had improved.
- Employers – 87% of employers said they were satisfied with the programme, 76% say that productivity has improved and 75% reported that apprenticeships improved the quality of their product or service.
- The Economy as a whole – The latest research, published June 2015, demonstrates the high level of return to investment delivered by the apprenticeship programme, indicating that adult apprenticeships at level 2 and level 3 deliver £26 and £28 of economic benefits respectively for each pound of Government investment.
The following table shows actual spending figures for Financial Years 2010-2014 and the baseline budget for 2015-16:
|16 to18 inclusive||744,870||758,966||670,211||717,575||783,198||789,600**|
|19 and over||450,880||624,602||753,886||737,022||776,573||770,000|
Notes:** For internal use only. These figures are as per the current 2015-16 budget delegation letters from DfE to EFA – it includes the additional £55m ring-fenced funding for AGE and funding for EOP but excludes non-participation (consistent with the actual figures for previous years). The 2015-16 budget figure will be updated with actual spend once the EFA 2015-16 Annual Report and Accounts are finalised.
Please note that the figures for Financial Year 2015-16 are for internal use only: Adult skills funding is prioritised where its impact is greatest and our priorities remain focused on apprenticeships, traineeships, and supporting unemployed people to improve their skills for work and all adults to gain a good standard in maths and English. For this academic year (2015/16), our total investment in apprenticeships will be around £1.5 billion but this is a demand led budget which responds to local employer and learner demand.
FUNDING 2016 -2020
The table below provides the latest provisional figures for our apprenticeships budgets (excluding non-participation). PLEASE NOTE: Only BIS figures are public. HMT have asked that the DfE and Totals are not used publically until they confirm otherwise.
- We are doubling the annual level of spending on apprenticeships between 2010-11 and 2019-20 in cash terms to £2.5bn.
- The apprenticeships levy will raise £3 billion in the UK. Spending on apprenticeships in England will be £2.5 billion, and Scotland, Wales and Northern Ireland will receive their fair share of the levy.
- Of the £2.5bn that will be spent in England, the total investment in adult apprenticeships in England will be £1.485 billion by 2019-20, and DfE is forecasting to invest about £1bn in 2019-20 (the remainder of the £2.5bn) on apprenticeships for 16-18 year olds.
- HOT TOPICS
Apprenticeships Comms Campaign: We launched a new apprenticeships communications campaign in May promoting the benefits of apprenticeships to young people, their influencers and employers – it builds on the previous successful Get In Go Far campaign. £13 million invested in this campaign by the end of the 2016/17fy.
National Apprenticeships Week 14-18 March: There were 31,897 pledges on the pledge-o-meter– of this, 30,126 were apprenticeships and 1,771 are traineeships. This surpassed the 23,000 pledges from last year.
National Insurance contributions: From 6 April 2016 employers are not required to pay employer National Insurance contributions for apprentices under age of 25 on earnings up to the upper earnings limit.
Apprenticeship Levy: Employer guidance on the apprenticeship levy was published 21 April. A UK-wide levy will be introduced in April 2017 for all employers in public and private sector with a pay bill of £3m or more, to help fund the increase in quantity and quality of apprenticeship training in England. As skills is a devolved matter it will be for the Devolved Administrations to decide how funds raised from the levy should be used in their administrations. Employers in England who pay the levy will choose and pay for the apprenticeship training and assessment they want through the digital apprenticeship service. From April 2017, employers will receive a 10% top-up to the funds entering their digital account every month and this will be available for them to spend on apprenticeship training. Employers in England that do not pay the levy will not need to use the digital apprenticeship service to pay for training and assessment. They will be asked to make a small contribution towards the cost of the training and assessment and government will pay as well. Both the employer and the government will pay the training provider direct.
Apprenticeship Grant for Employers (AGE): AGE has been extended until the end of the 2016/17 academic year. Eligible employers can receive a £1,500 grant per apprentice (aged 16 to 24) for up to five new apprentices currently. It is available to businesses with fewer than 50 employees, who have not taken on an apprentice in the last year. Provisional figures show that between February 2012 and January 2016 there were 193,700 apprenticeship starts for which a payment was made through AGE. A further 7,000 were in the pipeline (started but not yet paid). AGE funding has been devolved to some city regions as part of increasing local decision making powers.
Institute for Apprenticeships: A new independent body, led by employers, will be fully operational by April 2017 to support the quality of apprenticeship standards in England. It will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans; reviewing, approving or rejecting them; advising on the maximum level of Government funding available for standards; and quality assuring some end point assessments.
Apprentice National Minimum Wage (NMW): The rate for apprentices (or if aged 19, for their first year only) is £3.30. This is the legal minimum pay per hour. Most receive more; a median basic hourly pay rate of £6.31 for Level 2 and 3, and £9.68 for Level 4 and 5 Higher Apprentices. From 1 October 2016 the rate will increase by 3% to £3.40 per hour.
National Living Wage: The introduction of the National Living Wage from April 2016 will mean a 7.5% increase in hourly pay for someone aged 25 or over on the National Minimum Wage. Apprentices aged 25 and over will be entitled to at least £7.20 per hour.
Care Leavers: We are currently investigating a range of options to support care leavers with their transition into work. This includes considering how apprenticeships and study programmes including, traineeships can support care leavers. From 2016/17 employers taking on care leavers aged 19+ as apprentices will be entitled to the full funding rate paid for 16-18 year old apprentices.
Black, Asian and Minority Ethnic (BAME) 2020: We are supporting the Prime Minister’s 2020 vision by increasing the proportion of BAME apprentices by 20% by 2020.
Degree Apprenticeships: Employers and universities are co-designing apprenticeships to meet full occupational competency where the apprentice completes a degree (bachelor’s or master’s) as part of their apprenticeship. These apprenticeships give people the opportunity to attain a degree from some of our best universities whilst training in a top flight career. Degree Apprenticeships are already live in sectors such as Automotive, Banking, Digital Industries, Chartered Surveying, Aerospace and the Nuclear industry. We expect to see significant growth in Degree Apprenticeships across this Parliament. £10 million fund to boost the number of degree apprenticeships available, providing more opportunities for young people to fulfil their potential was announced in March 2016.
Enterprise Act: (4 May) https://www.gov.uk/government/collections/enterprise-bill.
- Legislation will set targets for public bodies in relation to apprenticeships in England.
- Protection of the term ‘apprenticeship’ to prevent misuse by providers in England.
- Introducing Apprenticeship levy data-sharing powers between HMRC, the Secretary of State and Devolved
- Establish the Institute for Apprenticeships and make provisions about its functions.
Traineeships: Available for young people aged 16 to 24. They give young people skills and vital experience needed to compete successfully for an apprenticeship or other sustainable employment. At their core is a high quality work experience placement with an employer, work preparation training and English and maths for those who have not achieved a GCSE Grade C or equivalent. Traineeships are continuing to grow: over 10,000 were started in the first year (2013/14); 19,400 in 2014/15 and 12,400 in the first two quarters of 2015/16. Our initial evaluation of year 1 trainees showed that 50% progressed to apprenticeships or other employment with a further 17% progressing to further learning.