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Apprenticeship funding changes spell a shift in financial support

Wednesday, 02 November 2016 16:01

Written by Candace Miller (Director of the National Skills Academy for Health)

Apprenticeship funding changes Funding for workplace training is set for a change in April 2017. Candace Miller, Director of the National Skills Academy for Health, says the changes could have a significant impact on the healthcare sector and must be made thoughtfully.

The new Apprenticeship Levy is set to shake up the way that private and public companies recruit and train apprentices when it comes into play on April 6, 2017. The levy requires all employers operating in the UK with an annual pay bill over £3 million to make an investment in apprenticeships, and all employers will be able to access a Register of approved Apprenticeship Training Providers.

As an employer-led organisation, the National Skills Academy for Health takes our steer from the views of our employer partners and, using their responses, we provided the Government with feedback on the proposals it set out this summer.

While we and many of our large, levy-paying employer partners welcome the increased control over apprenticeship training funds, there was a clear view that some of the changes being proposed could pose a significant threat to the achievement of goals for workforce development. Thankfully, some, although not all, of those concerns, appear to have been heard.

Need to support whole system apprenticeships growth

The healthcare sector is undergoing major transformational changes, designed to move to different models of care that are more sustainable and cost-efficient and enable improvements to be achieved in the quality of care provided to an ageing population. In that context, many NHS trusts are leading work to coordinate and streamline the services provided by smaller healthcare providers who act as part of their supply chain - and flexibility is key in those areas.

Some of the arrangements on which the government was consulting, and which it has now adopted, potentially place inadvertent obstacles in the path of apprenticeship growth. For the first year of the new system’s operation, levy paying employers will be able to use levy funds only for the training of their own staff. This restriction will thwart any move by healthcare levy payers to support apprenticeship training within their local supply chain, which appears to act against the principle of employer choice and could have a serious impact on the development of an integrated workforce.

In a similar vein, Apprenticeship Training Agencies (ATA) are used by large and small healthcare employers. Use of an ATA enables NHS Trusts who are otherwise constrained from taking on new staff to benefit from apprentice recruitment - but the policy will prevent such levy-paying employers from utilising the funds available to them to cover the training costs of ATA apprentices, at least for the first year of the levy coming in. Several large employer partners shared deep concerns that this policy proposal would seriously jeopardise their planned expansion of apprentice numbers. Yet those same ATA apprentices will be working and learning within employer premises for around 80% of their time, making a contribution to clinical and operational services within the NHS and, as far as the employers are concerned, they are very much ‘their’ apprentices.

While we welcome the clear commitment to enable levy payers to direct funds towards ATA apprentice training from 2018, and for an employer task force to consider how best to support supply chain engagement, there will still be disappointment within the sector that a full year will pass before this mechanism comes into play.

Harlene Dandy-Hughes, who works in Education, Training and Development at Guy’s & St. Thomas’ NHS Foundation Trust in London says that it uses the ATA service provided by the NSAH and has concerns over how the levy may affect its working.

“As one of the largest Hospital and Community Trusts in the country with around 15,000 staff, this leaves our HR directorate with limited capacity to support the apprentices we currently take or the increased numbers we would have to take in order to meet our public sector targets.

“If we are unable to use the levy to cover the training costs for apprentices employed by an ATA this will have a significant impact on our ability to meet our target. With the current financial pressures facing the NHS, the recent reduction in education funds from Health Education England and the introduction of the levy, it is hard to envisage how we are expected to cover these fees from our own budgets.”

Apprenticeships must be high-quality experiences

On the proposed approach to setting funding bands, we and our employer partners broadly welcome the flexibility given by the increased range of funding bands. However, we have urged that reliance solely on historical funding levels is too restrictive a benchmark for determining the allocation of a standard to a funding band; especially in a system in which employer-based provision is being encouraged and where investment in new technologies is crucial if the skills needed for new models of care are to be developed.

Other new proposal measures, such as a Register of Apprenticeship Training Providers (RoATP), have been received with interest - but there is some development to be undertaken within many health organisations before they are fully able to take advantage of becoming registered as an Employer-provider. The NSAH and our network of employer-hosted Excellence Centres will be doing everything we can to support employers on that development path. However, we are very concerned and disappointed that our feedback and call for a reconsideration of the low threshold level set for the quality of learning delivery that register applicants should meet has not been heard.

We fundamentally believe that apprentices deserve the best training from the best providers – whether that is in-house training by their employer or support from an external training organisation. Allowing organisations graded ‘Inadequate’ by Ofsted to deliver apprenticeship training threatens the credibility of apprenticeships, just when their value and comparability with other development routes, particularly at higher levels, needs to be robustly promoted.

Anita Esser, Head of Wider Healthcare Teams Education in the Training, Development and Workforce team at the University Hospital Southampton NHS Foundation Trust says one of the benefits of the levy is that it’s brought an increased interest from within the Trust in apprenticeships, from managers at department level right up through to the executive team.

“There’s an interest in how it can be used to help recruitment but also to help workforce development by supporting existing staff to progress into new roles. It’s giving us a forum to put together a detailed TNA and identify where there may be opportunities to do more work with external organisations like colleges, universities and training providers to offer apprenticeships at all levels across the different occupations in the Trust.

“It’s also helping in setting out progression routes right through to degree level in the future, so we can sell that career pathway to our local population and our existing staff so we can show them how they can progress.”

In terms of the RoATP, Anita says it’s an “unknown quantity at the moment and we are making plans around the apprenticeships we deliver ourselves”, adding that they, like many other apprenticeship training providers, will be looking closely at the post-consultation statements made by the government.

Moving forward with the proposal

The NSAH provides a range of services aimed at helping healthcare employers to benefit from apprenticeship recruitment and training and maximise the returns from government funding support, including advice and guidance on becoming a Registered Apprenticeship Training Provider.

We are robust advocates of the many benefits of apprenticeship training. As the new system comes into play, we are looking forward to continuing to support employers, whether levy paying or not, to plan for and gain from apprentice development.

For more information on the new Government apprenticeship funding, please visit: https://www.gov.uk/government/news/new-apprenticeship-funding-to-transform-investment-in-skills

For a discussion with the National Skills Academy for Health on any aspect of apprenticeship development please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it..