Apprenticeship Funding Rules in 2024: Changes & Challenges

Apprenticeship Funding Rules in 2024: Changes & Challenges

Apprenticeships form an essential part of education. They help recent graduates from high schools or universities to gain practical experience and develop skillsets that will form the foundation of their careers.

However, not all businesses have the budget to take on their own apprentices. This is why the UK government has developed the apprenticeship funding rules. These support businesses and apprentices in their training and assessment costs. The legislature that applies to these rules is regularly changed, ensuring that they advance with the times. Discover everything you need to know in order to apply for apprenticeship funding and stay up-to-date.

Understanding Apprenticeship Funding Rules

Beyond simply understanding what apprenticeship funding rules are, it’s also important that businesses, training providers, and apprentices themselves understand why these regulations are in place.

1. Ensures Accessibility

By providing funding towards apprenticeship initiatives, the UK government can ensure apprenticeships are accessible to as many people as possible. This means that even those who cannot afford a university education can gain skills that will help them further their careers.

2. Financial Assistance

By offering to fund apprenticeships, the government also increases the number of positions that are made available by businesses. Without this support, businesses may lack the resources to train apprentices, as the costs and efforts involved can be significant. However, with financial incentives to take on apprentices, businesses are more motivated to invest in training. They receive reimbursement and potentially gain valuable employees after the apprenticeships conclude, making the initiatives more worthwhile.

Who is Eligible for Funding?

One of the biggest economic challenges the UK government wants to address by funding apprenticeships is youth unemployment. To apply for funding a person needs to be:

  • Between 16 and 18 years old
  • Residing in the UK
  • Not receiving other funding through student loans
  • Not applying for funding to cover training they have already completed
  • Spending at least 50% of their working hours in England

Exemptions can be made for applicants between 19 and 24 years old if they have an Education, Health and Care (EHC) plan provided by their local authority, and in other special instances. However, these are the standard guidelines for eligibility.

older woman trains apprentices in an office as example of subcontractor apprenticeship funding rules

Changes To The Apprenticeship Funding Rules In 2024-2025

There have been a number of adjustments made to apprenticeship funding rules for the upcoming year. These can be divided into four different areas.

General Clarifications

The latest apprenticeship funding rules have been updated to clarify several details surrounding eligibility, remote and hybrid workers, and early completion of apprenticeships among others.

Reducing Administrative Requirements

One of the biggest challenges of taking on apprentices within a business is the time and effort that goes into administration. In previous years, some of the rules for apprenticeship funding added a further administrative burden on businesses. The 2024-2025 rule changes have reduced these requirements to simplify the process of onboarding and monitoring apprentices and claiming learning support.

An additional change which also impacts administration is an adjusted minimum requirement for active learning. In cases where businesses use front-loaded or block-release training models, the requirement has been changed to active learning being required every 3 calendar months. This reduces the burden placed on businesses where training is prioritised over specific periods.

Greater Flexibility in Subcontracting

Businesses also often find it difficult to ensure apprentices have access to the right sources for training. There may be areas that particular businesses don’t specialise in, for example. The 2024-2025 rule amendments allow more flexibility in the specialists that can be hired to conduct apprenticeship training. An added clause stipulates that an unregistered subcontractor can be hired if they deliver less than £100,000 of apprenticeship training across main providers each year. This is in addition to the previous subcontractor allowances which remain in effect.

Extended Flexibility in English and Mathematics

In the past, apprenticeship funding has only been available to applicants who had achieved a grade C or higher in English and mathematics. The 2024-2025 apprenticeship funding rules have been adjusted to allow those who have achieved lower grades in these subjects to still apply as apprentices. They will be required to further their English and maths qualifications as they learn, or can undergo a functional skills qualification to apply their knowledge in real-world scenarios. This makes apprenticeships accessible to a far broader range of learners, including those who may have learning difficulties.

What Financial Rules and Requirements Do Training Providers Need To Follow?

Apprenticeship training costs in the UK can be substantial. This is why the apprenticeship funding rules are very particular on the financial caps, spending rules and co-investment requirements for businesses that apply for funding.

Funding Bands

Apprenticeships are divided into different categories based on type and level and will fall into different funding bands. The funding band maximum ranges between £1,500 to £27,000 that the UK government will contribute towards the apprenticeship.

Spending Rules

Within these bands, payments are triggered according to specific training milestones. These could include an apprentice starting or completing their training, achieving particular skills or competencies, or progressing through assessments and certifications. A training provider can access these funds from their apprenticeship levy account or directly from the government.

Co-Investment

While government funding can contribute significantly towards apprenticeships, it is expected that employers will also contribute towards the cost of training. The co-investment requirements for businesses differ for levy-paying employers and non-levy-paying employers. The amount required is usually a percentage of the total apprenticeship cost. This is either paid directly to the government or deducted from your apprenticeship levy account.

apprentices undergo training and monitoring as part of apprenticeship funding rules

Apprenticeship Training, Monitoring and Compliance

Regulatory bodies conduct regular audits and inspections of training providers’ apprenticeship initiatives to ensure that the rules are adhered to. These regulatory bodies include the Education and Skills Funding Agency (ESFA) and Ofsted.

To stay compliant, businesses and training providers are expected to provide accurate reporting data and maintain high standards in their training provision. They also need to ensure that they are maintaining evidence portfolios for any training and assessments that apprentices complete alongside proof of apprentices’ eligibility.

Failure to meet the relevant regulations could not only mean financial penalties for your organisation but could have a negative impact on the apprentices as well. They will not have access to the training that they need to kickstart their careers, but will also be impacted by the reputational damage of participating in an apprenticeship programme with non-compliant training providers.

What Are Common Challenges With Apprenticeship Funding Rules?

Complexity of Funding Rules

Apprenticeship funding rules can be complex and they change on a regular basis. This can make it challenging for businesses to keep themselves up to date and ensure that they are always complying with relevant regulations.

Government agencies like ESFA run regular training sessions and workshops on compliance requirements. You can also network with other businesses for advice and best practices in ensuring that the funding rules are thoroughly understood and followed.

Administrative Burden

In previous years, the admin of managing apprenticeships has been a significant deterrent for businesses and training providers. There’s paperwork, reporting, evidence portfolios and more that need to be maintained for each apprentice. Assessments also need to be conducted regularly.

The latest changes to the funding rules have lessened this burden. However, there are also other tools that you can use to make the admin of conducting apprenticeships easier. Employee training software like Cloud Assess can help you maintain digital records of course enrolments and results. It also provides a simple platform for tracking evidence through log books, observation checks and more. Workflow automation also reduces the administrative burden placed on your HR teams.

Ensuring Training Consistency and Quality

Another challenge that businesses face is making sure that the training apprentices receive is consistent and of a high standard. Training providers may not have the in-house expertise that is needed to train apprentices in specific techniques, for example. Or the in-house experts that they do have may not have the time to conduct regular training sessions.

Changes to the apprenticeship funding rules for 2024-2025 have made this easier for businesses. By extending the rules to accommodate more subcontractors, training providers have more opportunities to bring professionals into their business to conduct training.

Understanding the endpoint assessment process is crucial for maintaining the quality and consistency of training programs. What is an endpoint assessment? They are evaluations ensure that apprentices’ performances are assessed fairly and comprehensively at the end of their training.

Having a platform like Cloud Assess as part of your tech stack will also be a great benefit in ensuring consistency in training. Enrolment management makes it easy to ensure that every apprentice receives the same online employee training, for example. Cloud Assess’ mobile-first approach and offline functionality also makes on-the-job and off-the-job training significantly easier to manage.

instructor trains female apprentice through practical assessment as part of apprenticeship funding rules

Other Considerations To Bear In Mind With Funding Rules

The latest changes to the apprenticeship funding rules make it easier for businesses to provide training to young individuals across diverse backgrounds. However, it’s important to remember that the funding rules are likely to change again.

When developing an apprenticeship programme within your business or training organisation, focusing on innovation, quality and inclusivity is critical. These are the primary goals behind the government’s apprenticeship funding initiatives. Focusing on these three areas will ensure that your training initiatives are lasting and require minimal adjustment to accommodate changing funding rules.

Next Read: If you are looking at setting up a training organisation, make sure to learn everything you need to know about how to register as a training provider in the UK.

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