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1 How to make the best of funding opportunities in 2018 Beej Kaczmarczyk and Jake Tween
2 The Policy Context Need to reduce the Budget deficit Need to improve skill levels and productivity More devolved powers and funding Finances of colleges and other providers deficits and cost variations Reform of the FE and skills sector refocus on technical and professional, specialisation, restructuring, Institutes of Technology New qualifications technical and academic Brexit! Implications for economic growth, migration and ESF
3 The markets for learning are changing Levy and non levy paying employers FE and HE learners funded by loans Learning Commissioners of adult education year old learners
4 How are learning programmes changing? New As/A levels, GCSEs and Functional Skills Study programmes Flexible delivery patterns Traineeships E-learning New technical and professional qualifications Apprenticeship standards Higher education in FE and workplace, inc. Degree Apps
5 Funding for FE and Skills Less dependence on public funding Except for adult entitlements Advanced Learner Loans will fund most adult level 3 to 6 provision Issue: how to increase demand for loans, e.g. Access to HE Apprenticeship Levy applies to larger employers 0.5% of paybill over 3m 10% top up from Government Co-investment for non-levy paying employers More funding decisions at local level
6 Changing context for Adult Funding Move from Adult Skills Budget (ASB) to Adult Education Budget (AEB) AEB set at indicative level of 1.5 billion in spending plans to Three key principles effectiveness, simplicity and localisation Current controls on subcontracting reinforced but more opportunities for subcontractors to be directly funded 2017/18 procurement of AEB from independent training providers ( 110 million) heavily oversubscribed Underspend on AEB of 200 million reported in 2016/17 Falls in adult participation numbers, including English and maths (200,000 since 2011/12) Devolution of AEB after 2019, with local commissioning Industrial Strategy and Skills Plan
7 Adult Education Budget (AEB) A single funding line that replaced adult further education outside of apprenticeships, Community Learning and Discretionary Learner Support (ESFA participation and support funding) It brings together a range of formula funded and non-formula funded budgets Statutory entitlements continue, e.g. first levels 2 and 3, English and maths Principal purpose is to engage adults and provide them with the skills and learning needed for work, an apprenticeship or further learning Enables adults to achieve qualifications as well as tailored programmes of learning, which do not need to include qualifications, to help those furthest from learning or employment Funds broader types of learning activities rather than qualifications, e.g. preparation for life, adult re-engagement, independent living, employability skills Increasingly subject to local devolution of funding and commissioning after 2018 to 2019 now delayed by a year!
8 Local flexibility Bespoke locally designed learning, that can include both qualifications and non-regulated learning to support Progression to full level 2 Retraining/upskilling for learners already in receipt of level 2 or above Qualifications and units of qualifications which are specified on the Hub, including ESOL Non-regulated learning, where robust and appropriate quality assurance is in place, i.e. RARPA (Recognising and Recording Progress and Achievement)
9 Local flexibility Learners eligible for local flexibility are either fully or co-funded From 1 August 2017, learners aged progressing to their first level 2 can only undertake learning at entry and level 1 from local flexibility Can be used alongside the legal entitlements, e.g. level 2 diploma and a non-regulated time management course Non-regulated learning and/or qualifications and units at entry, level 1 and 2 Aged 19+
10 Skills Devolution Skills deals Greater Manchester Liverpool City Region West Midlands Tees Valley West of England Cambridgeshire Greater London Sheffield City Region North of Tyne Policy uncertainty Deals still stand Delay from to Influencing role
11 The labour market matters! Getting people into jobs, keeping them in jobs and helping them to progress = critical role for FE and Skills sector Importance of LOCAL labour markets for most of our learners Not just plan and provide the provider as driver of employment opportunities and community development Not just about apprenticeships what about other technical education and pre-apprenticeships? Effective engagement with employers is critical! Forming the right investment partnerships for local markets to develop and grow and attract inward investment Local Enterprise Partnerships and City Regions How well is your provision aligned with local and regional priorities?
12 Devolution of funding Government views AEB as funding for a local service to respond to local needs so responsibilities should be at local level rather than national More devolution of AEB to LEPs and Combined Authorities to obtain a better alignment of skills delivery with local priorities Transitional arrangements in place, e.g. ESFA and LEPs working on joint management and monitoring of the Adult Education Budget Local outcome agreements to set out the broad outcomes that the skills system achieves, and could lead to new funding arrangements in terms of rates and payment mechanisms The role of mayoral authorities in influencing allocations Implementing skills devolution in 7 to 9 areas - (grant or contract? data requirements? cross border issues?) The European Social Fund replacement (Shared Prosperity Fund) and relationship to AEB How well prepared are you for local commissioning?
13 The mixed economy offer
14 Advanced Learner Loans The government has expanded tuition fee loans to 19 to 23 year olds at levels 3 and 4, and 19+ year olds at levels 5 and 6 to provide a clear route for learners to develop high-level technical and professional skills Loans facility will grow from 202 to 480 million by Loans are available to individuals aged 19 and older Loans are available for approved learning aims at Levels 3, 4, 5 and 6 Learners are entitled to access up to four loans, which they can now take out either one after the other, or simultaneously
15 Advanced Learner Loans - Issues operate the same way as 24+ loans - covers whole cost/fee Where will the additional demand come from? Already a significant gap between loans facilities and actual take up. Challenge to providers to increase demand for loans, e.g. Access to HE Implications for curriculum design and delivery Identified as very high uncertainty rating in policy costings Dependent on availability of higher level qualifications from awarding organisations Not enough provision at levels 4 to 6
16 Implications for planning and delivery of loan funded provision Integrating loans into your training offer Modes of delivery and attendance Wider range of support requirements, e.g. childcare Fee determination and course viability mixed economy classes Retention and achievement Funding is reduced for poor retention Reputational risks Learner Support and Learning Support Partner relationships To activate new markets and grow demand How flexible and responsive can you be?
17 Case study Level 3 Diploma Can I study in the evening and at weekends? Can I do some of my study by distance or on-line? Can I do concentrated periods of study, e.g. Easter school of 30 hours in one week? Can I choose and pay for a modular route? Will this qualification really help me gain promotion? Will the programme make me more effective or productive? What qualifications can I do next? Can you help them progress into further career advice? And many other questions that learners may ask before they commit to the learning and apply for a loan
18 Reform of Apprenticeships Provider control Provider funded for delivery of SASE framework Employer contribution expected but not always collected Different rates for different ages, location of training and size of employer Transition Employers have more control over content of new standards Funding partially to employer (incentives) and provider Employer contribution in cash ( 2 for every 1 from employer) Remove some of the complications Implications of end point assessment Employer control Content and delivery controlled by employer Large employers pay 0.5% paybill tax as levy Employers use digital accounts to pay for training and assessment Non levy paying employers co-invest 10% of cost of training and assessment New RoATP
19 Apprenticeship funding policy year old uplift Providers and employers training year olds will receive 1,000 payment each. For frameworks, the government will provide a transitional 20% uplift, also applies to year olds in care or with EHCP Small Employers Employers with fewer than 50 employees will have 100% of the training and assessment costs covered when training a year old (or year old formerly in care or has a Local Authority EHCP) Additional learning support ESFA will pay training providers up to 150 a month to support learners with learning difficulties or disabilities, plus additional costs based on evidenced need Disadvantaged uplift Training providers will receive additional payments for training apprentices who live in the top 27% deprived areas. 600 for the top 10% of deprived areas, 300 for the next 10% range and 200 for the next 7% range. English and Maths training To meet minimum standards of English and maths ESFA will pay training providers 471 for each of these qualifications (Level 1 and 2) Prior qualifications Levy funds and co-investment can be used to fund an individual undertaking an apprenticeship at the same or lower level provided they will acquire substantive new skills. Funding bands All existing frameworks and standards have been placed into one of 15 funding bands, with the upper limit of those bands ranging from 1500 to Employers will negotiate a price for their apprentices training and assessment. Co-investment Employers that do not pay the levy or do not have sufficient funds in their levy accounts will need to contribute 10% of the training and assessment cost, the government will pay the remaining 90%.
20 Additional support Key features of the levy Expiration of digital accounts Funds in digital accounts will expire after 24 months. This will help employers to prepare for the new system and to adapt training programmes. Starts prior to May 2017 All apprentices that started a framework or standard before 1 May 2017 will be funded through to completion under the rules and rates in place when they started. Digital funds Funds in digital accounts will be dependent on the proportion of employer s paybill paid to their workforce living in England. Funds entering the digital account will be topped up by 10%. UK workers Employers will be able to use levy funds and government co-investment to pay for training for apprentices whose main place of work is in England, even if they live elsewhere in the UK. Transferring funds From 2018, the ESFA intends to allow levy payers to transfer a proportion (10%) of their funds to other employers in the digital system and ATAs.
21 Biggest concern for an apprenticeship provider...is my apprenticeship provision viable? How frameworks and standards have been allocated to funding bands Can non-levy paying employers afford the 10% contribution? No lower band limit and price competition Payment schedules from employers Impact of 20% completion element Removal of some cost factors, e.g. area costs Do additional payments reflect real costs? Three funding systems running at the same time!
22 Review of current apprenticeship provision Are the current suite of qualifications financially viable post levy? - New funding bands and the impact on margin - Utilising local market intelligence and current provider funding report to understand growth needs - Does the delivery model need to change? - Cost of value added elements of delivery versus business development value
23 Marketing strategies Build (or rebuild) your brand values, positioning and personality Creating a customer experience that brings your brand to life energising your people, e.g. sales, assessors, tutors, support staff Communicating your brand and offer effectively to the apprenticeship market Understanding the target audience and their buying system, sales pitches Employer events, mail shots, site visits, guest presenting at events/meetings, Business-to-Business communications, Organisational Training Needs Analysis Assist employers with their training provider engagement strategy
24 Effective engagement Sourcing talent Design and delivery Proven track record Employer decision Ability to scale up Added value Embed work based learning Put yourself in the employer s shoes who has to pick through the different offerings and identify the provider which best meets their needs
25 Pricing and payments strategy Number Band limit 1 1, , , , , , , , , , , , , ,000 Every apprenticeship is placed in a funding band with all new starts Employers can negotiate the best price for the training they require Price based on full cost of band emphasis on quality Standards sometimes better funded than frameworks Incentives bespoke training, additional qualifications Added value propositions, e.g. recruitment of talent Employer contract required model contracts Direct debit, BACs and credit card arrangements Full support service in place for levy payers 15 27,000 25
26 Questions How can we more effectively engage with the whole range of employers? How can your curriculum managers become more commercially aware? How can we increase the contribution rates from apprenticeship provision? What is your value proposition?
27 Apprenticeships, 2018 and beyond Short term issues ( ) Issues associated with the non-levy procurement Likely underspend because levy payers are cautious, standards are late and new co-funding rule is an obstacle Changes associated with new standards Long term issues (2019 and beyond) The plan to bring all employers into DAS Creating a more sustainable and high quality apprenticeship system focused on Level 3 and above
28 Implications for all providers Understanding our markets and products Importance of growing FE, HE and other markets Curriculum development to meet demand Moving away from dependence on public funding Moving away from annual allocations mentality Getting the quality right, first time Building improvement into all operations Investing in staff and other resources Skills and qualities Capital projects Innovation in curriculum design and delivery Changing the culture A new way of doing things! The challenge for colleges and training providers
29 Many thanks Please feel free to contact us. Don t forget to ask us about the e-memoir subscription service Jake Tween Jake.Tween@i-l-m.com Beej Kaczmarczyk beejkacz@gmail.co.uk e-memoir info@
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