Co-funding for degree apprenticeships

Name of the instrument in English: Co-funding for degree apprenticeships
Country: United Kingdom
Type of instrument: Grants for companies

Level of operation

National

Part of the country where the instrument applies

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Region(s) in which the instrument applies

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Sector(s) in which the instrument applies

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Legal basis

Apprenticeships, Skills, Children and Learning Act 2009 (as amended). Most Government apprenticeships schemes are funded in part using section 100 of the 2009 Act (as amended) (the old frameworks under section 100(1)). The Apprenticeship Act refers to apprenticeship funding in general terms. The government sets priorities and budgets for the SFA/ESFA in the annual Skills Funding Letter. The funding details for apprenticeships are then laid down in the annual SFA/ESFA funding rules for apprenticeships. This includes a separate document on Trailblazer Apprenticeships Funding Rules 2015 to 2016 which details government and employer co-payment for the new Apprenticeship Standards developed as part of these new Trailblazers.

All apprenticeships started before 1 May 2017 will be funded through to completion according to the existing rules.

Objective(s) and target(s)

The aim of both higher and degree level apprenticeships is to "widen access to the professions and develop the higher level technical skills needed to improve productivity and support businesses to compete internationally" (HM Government, 2015, p.18). The Apprenticeship levy was introduced to increase Apprenticeship funding and to help meet the target of 3 million new Apprenticeships starts between 2015 and 2020. There are no separate targets for degree apprenticeships.

Year of introduction

2009 (as amended). Degree level apprenticeship scheme was launched in 2015.

Governance (management, operation, monitoring and evaluation)

Skills Funding Agency (SFA) until March 2017 and as of April 2017, the Education and Skills Funding Agency (as the SFA and the Education Funding Agency have been merged) is responsible for the overall management, monitoring and evaluation of the instrument as well as day-to-day operation. The recently established Institute for Apprenticeships will advise the government on funding bands for apprenticeships.

Eligible group(s)

All companies.

In line with the priorities set by the government for 2015-16, particular emphasis is put on the growth of apprenticeships for 16-24 year olds, higher apprenticeships (particularly levels 6 and 7), priority sectors and small businesses.

Education and training eligible

The instrument supports only apprenticeship. Funding is available for all levels of apprenticeships, however, Degree level apprenticeships scheme refer to the levels 6 (Bachelor), 7 (Masters).

Source of financing and collection mechanism

State

Financing formula and allocation mechanisms

The funding for off the job training provision will be paid to the training provider directly. The state covers two-thirds (including external training and assessment) of off-the-job training i.e. up to the maximum funding band set for each apprenticeship for Apprenticeship Standards (e.g. the state would co-fund EUR 20,520 for the entire training for the highest funding band set at EUR 30,780.00 ). Assuming that equal instalments will be paid each year this amounts to EUR 5,130 per year. In addition, the state will pay up to 3 incentive grants. Since incentive payments vary by funding band, the figures are provided for the highest funding band:
(1) The employer receives EUR 3,078 when the apprentice has completed his or her degree apprenticeship;
(2) The state pays EUR 3,078 for each apprentice if the company could otherwise not afford to take on an apprenticeship aged 16 to 24 years (so-called AGE grant). These AGE grants are only available to SMEs with less than 50 employees and to companies who did not employ an apprentice in the previous 12 months.
(3) the State pays EUR 6,156.00 for recruiting a 16-18 year old.

If we assume a four-year degree apprentice programme which attracts the highest funding cap (30,780 EUR), the maximum government payment is 32,832.00 EUR. This figure includes the three additional incentive grants listed above (recruiting a 16 to 18 year-old; incentives for businesses with fewer than 50 employees; and payment for successful completion of the apprenticeship)

In this example, the yearly maximum amount of funding is:
11,286 EUR for year 1;
8,208 EUR for year 2;
5,130 EUR for year 3 and
8,208 EUR for year 4.
This assumes that the off-the-job training is paid in equal instalments over the 4 year

Funds are disbursed to all eligible applicants on the basis of the legal entitlement.

Eligible costs

Off-the-job training at a higher education institution

Volumes of funding

Figures are not separated out by degree level. Figures are available for the funding that went into the development of the degree apprenticeships but not the actual delivery of degree apprenticeships.
No EU funds involved.

Beneficiaries/take up

na (not known, the launch of the degree level apprenticeship scheme is too recent).

Monitoring/evaluation reports available

Monitoring/evaluation results

Not known yet as the first cohort of degree apprentices have not yet completed their qualification.

Recent or planned changes

In May 2017, the Apprenticeship levy was introduced through the Finance Bill 2016. It applies to large companies with a pay bill above GBP 3 million. These large employers pay the apprenticeship training in full through the levy. If apprenticeship funding exceeds their levy, different rules apply.

Sources