Feb 1ST

Apprenticeship Reform – How does this impact on SME and Micro Businesses?

If you do not have a payroll in excel of £3 million you may believe that the Apprenticeship Levy will not affect you.  However this levy is part of a wider reform of the apprenticeship system which will affect employers of all sizes who plan to take on apprentices after May 2017.  Moulton College is keen to support employers across the specialisms in Construction and Land based industries to understand these changes and support you to continue to enjoy the benefits that apprentices can bring to your business.

If you are not affected by the apprenticeship levy it is still important that you are aware of the changes to apprenticeships since they could affect any existing or future plans to use apprentices to grow and enhance your workforce.  Apprentices who have been accepted on to an apprenticeship before May 2017 will be funded for the full duration of the apprenticeship under the conditions that were in place at the time their apprenticeship started.  However the apprenticeship reforms will affect any new apprenticeship starts after May 2017.

An apprenticeship is defined as a job in a skilled occupation which requires substantial and sustained training, lasting a minimum of 12 months.  At least 20% of the training should be off-the-job training and the apprenticeship should develop transferable skills and English and maths to a relevant level to allow career progression.  Most importantly on completion an apprentice should demonstrate full competency and capability in their chosen occupation and gain professional recognition where this exists.

From May 2017 there is an expectation that all employers will contribute towards the cost of apprenticeship training.  While a major part of this will be from the apprenticeship levy, even employers who are not subject to the levy will need to contribute 10% of the cost of apprenticeship training with the government funding the remaining 90% of the training and assessment cost.  This contribution will be waived for young apprentices (16 - 18 year old) with small employers (less than 50 employees) and there will also be an additional incentive for this age group of £1000, paid in two equal instalments at three and twelve months, to support the additional employer costs associated with employing a young apprentice.  The government will also fully fund any additional learning support and English and maths training required to support apprenticeship achievement.

Moving forward there will be no fixed cost for training; employers will be able to negotiate training costs and content with providers up to set funding bands.  The upper limit of each funding band will cap the maximum price that government will ‘co‐invest’ towards apprenticeship training.  If employers want to spend more than the funding band limit to allow for additional or bespoke training then they will be free to do that but will need to fully fund this additional training.  Each apprenticeship will be placed into a funding band which will range from £1500 to £27000 so these contributions will range from £150 to £2700.  The majority of intermediate apprenticeships will be in the £1500 - £6000 band giving a maximum contribution of £600, which can be spread across the length of the apprenticeship framework if required.  However when considered in the context of the benefits that apprenticeships can bring to a business, this contribution should soon be recovered in increased productivity and filling essential skills gaps.  92% of employers who employ apprentices believe that Apprenticeships lead to a more motivated and satisfied workforce and 81% of consumers favour using a company which takes on apprentices.

SME and micro-businesses are currently under-represented in the current employer groups that are writing the new standards that will form the basis of future apprenticeship delivery.  These standards will be short, concise and clear and will set out the full competence needed in an occupation in terms of Knowledge, Skills and Behaviour (KSBs) and will be assessed by an end point assessment which will test that the apprentice is fully occupationally competent in that role.  It is essential that businesses of all sizes are involved in the development of standards so that they represent occupational competence for all businesses and not just the larger employers.

Current apprenticeship frameworks will still be available until they are replaced by relevant standards, which are intended to be completed before the end of the current parliament.  There is still time to get involved with development of apprenticeship standards or even work with a group of like-minded employer to start development of a new standard within your occupation if there is no relevant apprenticeship being developed.  Further details of apprenticeships standards approved or in development can be found here. https://www.gov.uk/government/collections/apprenticeship-standards

Moulton College is committed to support employers and learners wanting to take advantage of apprenticeships to support and grow their business.  Moulton College is a specialist college with a strong reputation for meeting employer needs in the construction and land based industries.  We have been working with employers across Northampton and surrounding counties to maximise the benefit of apprentices to help fill the skills shortage in land based and construction industries.  All Moulton apprentices benefit from customised training from an experienced team of lecturers and assessors with extensive industrial experience in their relevant sectors.  We are the largest provider of Construction apprenticeships in the region with opportunity for progression from intermediate to higher levels and offer unrivalled facilities alongside a supportive environment that ensures everyone achieves their goals. 

Moulton College employs a team of dedicated Apprenticeship Advisors to guide you through every step of the apprenticeship process.  Our advisors are specialist in your industry and have the experience and knowledge to guide you through every step of the apprenticeship process.  They can support initial recruitment including placing adverts on the National Apprenticeship website and highlighting your requirement with our current full time students.  They will also support both you and your apprentices throughout the apprenticeship training to ensure successful completion.  We can also develop bespoke programmes to meet your requirements within our specialisms.

Moulton College can offer free advice and guidance on the changes to apprenticeships and how to best take advantage of the opportunity it will create.  We will be hosting a series of free information events over the next couple of months with the first being planned for Thursday 23rd February.  Come and join us for supper to learn how we can help you find a clear way through these changes to grow and develop your workforce filling current and future skills shortages.