New Year, New Rules - EU Skills

New Year, New Rules

The 2022/2023 year sees new apprenticeship funding rules – what might they mean for you?

Group of apprentices

The Education and Skills Funding Agency (ESFA) announcement at the end of May describes four key changes that will be of interest to employers and training providers and introduces the ESFA’s (draft) apprenticeship funding rules for 2022/2023, which detail more than twenty-five new rules for the coming year. 

While the news that the ESFA will provide a more efficient payment service should be welcomed by all, it is likely to be the other headline announcements that will cause wider consideration of what the rule changes will mean for employers, apprentices and training providers.  

Initial Assessment

The announcement describes the ESFA’s support for enabling learners to accelerate their apprenticeship by having a sharper focus on the assessment of the learner’s prior learning and experience and making the initial assessment an eligible cost which can be claimed against the available funds. Initial assessment has always been a required element of apprenticeship training but was not previously an eligible cost.  The ESFA suggest that this renewed emphasis on initial assessments will result in apprentices being able to spend more time in the workplace and become fully competent sooner. However, the intended result of the new funded initial assessment requirement is a reduction in the cost of the apprenticeship.

The draft funding rules offer more detail stating “We have outlined what the assessment of prior learning activity must include. This includes a new formula that must be used to reduce the price, to account for prior learning.”

The draft rules describe how an initial assessment of the individual’s abilities that is in line with the proposed apprenticeships must carried out by the training provider or employer-provider and must include an assessment of the learner’s eligibility, a skills-scan that assesses the individual against the knowledge, skills and behaviour requirements of the standard, diagnostic testing of occupational competence (and English and maths where relevant), and identification and recognition of the individual’s prior learning and experience which must be referenced in the evidence pack (which is subject to ESFA scrutiny and audit).

The new formula requires that initial assessment “must quantify the content which should be omitted from the training plan, in the form of a volume of off-the-job training hours,” and “The reduction of off-the-job training hours must translate to a reduction in duration and in the total negotiated price.”

The example given in the draft funding rules describes how if the usual amount of off-the-job training hours for an apprentice with no relevant prior learning is 1000 hours, and an initial assessment identifies that a learners’ prior learning equates to 300 hours of off-the-job training, that is classed as 30% prior learning. The price of training must then be reduced by at least 50% of that figure, which in this case means a reduction of at least 15% of the maximum funding band, and the reduced price is the maximum that can be paid using apprenticeship funding – for example £8,500 for a £10,000 funding band. This new maximum funding amount then becomes the starting point for any further negotiation on price between a training provider and an employer.

Considering the technical standards used in the energy and utilities sector, some businesses may welcome the designation of initial assessment activity as an eligible cost that can be recovered from levy funds, but the result may be that less funding is available for training, where existing skills and knowledge have been identified by the initial assessment.  

In many cases apprenticeships in the energy and utilities sector are used to upskill or reskill existing workers who may be likely to have some existing skills and knowledge relevant to the apprenticeship standard they are taking. This must now be accounted for in the form of reduced hours in the training plan and reduced funds for the training as a result.

At the other end of the apprenticeship, End Point Assessment costs reflect the rigour and demands of the apprenticeship standard and are not impacted by initial assessment.

Off-the-job training

The ESFA’s second key change for 2022/23 is a change of approach in the minimum hours that must be taken as off-the-job training. This is currently interpreted as 20% (and in practice, is often taken as one day per week). In Energy & Utility Skills’ “Test & Adjust” report (2019) on apprenticeship reform, sector businesses called for a more flexible approach to the 20% off-the-job element that has quality and consistency in outcomes at its core rather than rules and processes.

The ESFA announcement proposes the introduction of “a consistent baseline for off-the-job training, specifying the minimum number of hours that a full-time apprentice must spend in training. This will simplify the reporting for providers and create a level-playing field among apprentices who are on the same standard but working different hours. This means that apprentices who work more than 30 hours a week will be able to spend more time on the job delivering for employers, while still getting the vital training they need to complete their apprenticeships.”

The draft funding guidance describes that “To be eligible for government funding all full-time apprentices (those that work 30 hours per week or more) must spend, as a minimum, 6 hours per week, over the planned duration of the practical period, on off-the-job training.

Although the 6 hours per week figure is a minimum based on the 30-hour eligibility for a full-time apprentice, and some apprentices may need and receive more than that, full-time apprentices working more than 30 hours per week could see more time available in the workplace. An initial assessment carried out under the new rule could lead to less time needed for off-the-job training, potentially allowing more time in the workplace to develop occupational competence, which may mean a shorter apprenticeship than typical for the standard, and quicker progress to End Point Assessment.

Shorter programmes to competence could help to support the transition of sector roles as the move to a net zero economy increases demand for upskilling and reskilling.

English and Maths

The ESFA announcement also described changes in the English and maths requirements for Level 2 apprentices who start with the lowest level of prior attainment in English and maths. People who start a Level 2 apprenticeship without Level 1 English and maths will no longer need to automatically attempt Level 2 English and maths tests to complete their apprenticeship. It will mean that thousands of Level 2 apprentices can focus on securing Level 1 English and maths qualifications with only those who are really ready to take the Level 2 tests attempting them.

The draft funding guidance describes that all apprentices will be required to achieve Level 1 (where they have not already) as a minimum, and where appropriate, work towards Level 2 English and maths. Not all Level 2 apprentices will be required to take the assessments at Level 2. (Level 2 English/maths must be achieved if specified within the apprenticeship standard.)

While most of the energy and utility sectors’ technical standards require Level 2 maths and English as a pre-requisite to End Point Assessment, sector employers may broadly welcome the ESFA’s removal of the blanket requirement to achieve Level 2 English and maths as part of the wider apprenticeship programme.

While recent research found that 71% of level 2 apprenticeship vacancies had maths and English requirements, half of disadvantaged young people do not achieve these maths and English requirements in school, which is then a barrier to apprenticeship participation for these groups.

The Education and Skills Funding Agency’s comprehensive suite of funding rules can be found here.