New funding model guidance (2022)

1. Apprenticeship funding bands

Each apprenticeship is allocated to one of 30 funding bands, which range from £1,500 to £27,000.
Each funding band sets the maximum amount of digital funds an employer (who pays the levy) can use towards an individual apprenticeship. The funding band also sets the maximum price that government will ‘co-invest’ towards an individual apprenticeship, where an employer does not pay the levy or has insufficient digital funds and is eligible for extra government support.

Information about the apprenticeship levy and spending apprenticeship funds is available on GOV.UK

Funding can be used to pay for apprenticeship training and assessment for apprentices. The funding band is not a funding rate and employers are expected to negotiate with training providers and end-point assessment organisations (EPAOs) to agree an appropriate price. If the costs of training and assessment are more than the funding band, and agreed between the employer and training provider, employers will need to pay the difference with other funds.

Details about which costs can and can’t be funded are set out in the Education and Skills Funding Agency’s (ESFA) apprenticeship funding rules.

In a core and options apprenticeship, there are core duties and knowledge, skills and behaviours (KSBs) that are shared across the occupations. There are also duties, knowledge, and skills (and maybe behaviours) specific to each occupation (option). Each apprentice must attain all of the core KSB’s and also attain all of the KSB’s in just one of the options. In practice, this means there is some variance in the learner journey, including the training provided.

Core and option apprenticeships will however be allocated one funding band. Where options have different costs associated with them, the funding band will be assigned based on the lowest cost option to achieve the apprenticeship. Training for any options taken beyond the ‘minimum’ required for the apprenticeship would be outside the apprenticeship, and employers will need to pay the difference.

2. Allocating a funding band

Trailblazers, being groups of employers that are representative of their occupations, are best placed to submit the information that is required.

Pre-allocation process

When we agree your occupation proposal, we will provide you with information about the funding bands assigned to apprenticeships that share similar characteristics, for example the same route, similar level, and duration. This is to give you an overview of typical levels of funding.

The Institute will provide you with our best estimate of typical training delivery salary costs prior to making our funding band recommendation. This is explained in further detail below.

Submitting information, evidence, and quotes

You need to provide the Institute with the following information, as per the 6 step process detailed below:

  • Eligible consumables costs, as detailed in the ESFA apprenticeship funding rules
  • information about trainer/tutor salaries, where you do not agree with the Institute’s best estimate of typical salary costs.
  • expected group sizes for apprenticeship training
  • proportions of directed vs self-directed (independent) learning
  • mandatory qualification fees
  • End-point assessment organisation quote(s)

In order to gather the information the Institute requires to allocate a funding band, you may wish to work with one or more organisations that has experience of delivering high quality apprenticeship training. Your product manager (PM) is also able to provide advice on ways to gather the information the Institute requires. It will be down to you, the trailblazer, to decide the final set of information you provide us

When you submit your end-point assessment (EPA) plan, you should submit at least one end point assessment organisation (EPAO) quote based on that plan. This quote can be obtained from any EPAO that is able to deliver the EPA. They do not have to be an organisation currently listed on the register of end-point assessment organisations (RoEPAO). You should use the apprenticeship training delivery quote form to capture this information. If it’s not possible to get a quote from an EPAO, please discuss options with your PM.

You need to submit your data, supporting evidence, and EPAO quote at the same time as your EPA plan.

The Institute will support you in making sure the information is of high quality. As part of the Institute’s verification of the information and evidence you have provided you may be asked by an Institute Funding Manager (FM) to provide additional evidence or clarification to support the information submitted.

The information you provide will be used by us during the approval process and funding band allocation process. This may include sharing this information with the Secretary of State (or their delegate) to support them in their decision making when considering our funding band recommendation. The information may also be used by us to develop and test potential new processes or improvements to our existing processes. By submitting information, either via the apprenticeship builder software or your PM, you agree to us using it for these purposes. If you do not agree to the information being used in this way you should raise this with your PM prior to submission.

3. Recommending a funding band

The data, supporting evidence, and EPAO quotes provided by a trailblazer group help inform our funding band recommendation, alongside other factors detailed in this guidance.

We follow the steps below:

Step 1. Institute best estimate of salary costs and trailblazer training information and EPA quote supplied

The Institute will provide you with our best estimate of typical training delivery salary costs. This estimate will be made using our independent evidence base (IFF “Costs of delivering apprenticeship standards” report) and Office for National Statistics salary data.

If the Institute’s best estimate of typical training deliver salary costs needs adjustment you should submit additional evidence to support your best estimate of typical salary costs. This information must be submitted alongside two forms of evidence from the list below:​

  1. Wage information from three regions of England: in the form of advertised vacancies for the occupation from the last 12 months
  2. Two training provider teaching salary quotes
  3. Sector evidence of typical training delivery salary costs e.g. Sector body report, economic report, academic paper etc.​

Alongside any information and evidence of typical trainer/tutor salaries you may wish to submit, you must provide information and evidence of consumable costs, consumables costs, expected group sizes, proportions of directed vs self-directed (independent) learning, and mandatory qualification fees.

You must also provide an EPAO quote(s). We assume that all EPA quotes provided are for high-quality assessment. On this basis, the lowest moderated EPAO quote is taken forward to step 4, to provide value for money.

Step 2. Institute moderation and verification of information supplied

Once we have received this information the Institute will moderate it against the apprenticeship funding rules. We will then verify submitted data and evidence against a number of independent data and evidence points, and with independent sector experts (peer review). These independent verification points will include:

  1. Advice from the Institute’s route panel(s)

Prior to the FM making a recommendation as part of the approval process, we may request expert insight from the Institute’s route panel (RP). If we do so, we will arrange for the RP to provide their expert view on the typical training delivery of the occupational standard.

The RP may suggest any additional sources of evidence to consider as part of the funding band recommendation process and the expected trainer/tutor salary, consumables, and mandatory qualification costs. The RP do not approve funding band recommendations. The RP review and consider FM funding band recommendations and provide advice to our compliance board.

  1. Peer review

Prior to the FM making a recommendation as part of the approval process, we may request expert insight from an independent third party. If we do so, we will arrange for an independent third party to review your occupational standard and EPA plan to provide expert comment on the training costs associated with training delivery of your apprenticeship proposal. The independent third party, known as a peer reviewer, is chosen for their relevant experience of the occupation/sector in which the occupation is found. The trailblazer group and RP will receive a summary of their comments. We will not arrange for review by an independent third party if we decide that it is not necessary, for example, if we conclude that we already have adequate information to make a recommendation or because there is no suitable independent third party to conduct the review.

  1. Mandatory qualification price lists

Where a mandatory qualification(s) is required as part of the occupational standard we will, if necessary, adjust the qualification costs of the mandatory qualification(s) in line with publicly funded rates, or market prices at RoATP approved organisations, to provide value for money.

  1. Checking trailblazer submitted salary evidence

If you have submitted evidence, in support of a request to adjust the Institute’s best estimate of typical training deliver salary costs, we will consider whether this evidence meets the criteria outlined in step 1 of this guidance. Where we verify that the evidence submitted by the trailblazer is valid it could impact on our recommendation.

To ensure value for money where the submitted evidence meets our criteria, we will take the lowest costed evidence point forward as the typical training delivery salary cost.

Moderation and verification of information supplied may lead to us revising down costs that have been submitted to us. Where inputs cannot be evidenced, or evidence points suggest costs submitted to us are inaccurate, it could impact our recommendation.

Step 3. Independent evidence base

The Institute will use IFF “Costs of delivering apprenticeship standards” report to estimate the typical costs of administration, overheads, and formative assessment for apprenticeship training delivery.

Step 4. End-point assessment cost

Costs in the lowest moderated EPA quote are removed or adjusted in line with ESFA funding rules and guidance.

We assume that all quotes provided are for high-quality training and assessment. On this basis, the lowest moderated training provider and EPAO quote is taken forward to the next step, to provide value for money.

Step 5. Explanation of identified evidence and expert opinion

The Institute will provide you with a summary of the peer review and route panel feedback, as well as confirming the identified evidence of typical costs that will be used to make a funding band recommendation.

You will be invited to submit any additional evidence before the Institute makes a funding band recommendation. You must inform the Institute of your intention to submit additional evidence within 10 working days. You will then have a further 10 working days to submit this additional evidence. You should request additional time if this is not a feasible timeframe.

Any new evidence supplied by the trailblazer group will be fully verified by the Institute and could delay progress, leading to a funding band recommendation being made in a later cycle.

We will remind the trailblazer of the stability mechanism exemption criteria. If the apprenticeship is not exempt from application of the stability mechanism we will give an indication of its likely impact on the funding band that could be recommended.

Step 6. Combining evidence points

The institute will collate all identified typical costs to be used as part of the funding band recommendation calculation. This includes training delivery, consumables, mandatory qualification(s), administration, and EPA costs. The Institute will also make an uplift of 9% (see our calculation below) to reflect the need for a commercial organisation to have some level of margin above those costs deemed eligible.

Step 7. The funding team makes a recommendation

Find out more in the calculation and explanation of rates guidance

After the approval process

Step 8. Review and approval

The recommended funding band, alongside the evidence outlined in steps 1 to 5, is provided to the relevant route panel for their input.

The recommended funding band and route panel input are then presented to the compliance board, a sub-committee of the Institute’s board, for approval.

The Board may approve the recommended funding band or, where they require more information, defer it for consideration at a future meeting. We will let you know when this happens and whether we require you to submit additional information.

We will write to you with the outcome, once the compliance board, a sub-committee of the Institute's board, approves the funding band recommendation. Once we have made, and you have accepted, our funding band recommendation you will be given the opportunity to provide additional trailblazer contextual information (ATCI) for the Secretary of State to consider, alongside our funding band recommendation, in order to make a final funding band decision. The submission of ATCI is optional and must be submitted within 10 working days of being notified of our funding band recommendation.

The Institute will produce a sector report (SR) to be submitted alongside the funding band recommendation and ATCI. The SR will include publicly available information about the occupation, sector, and Institute published funding band information. Where the apprenticeship is a revision, the SR will also include existing programme delivery and completion data.

The recommended funding band, SR and ATCI are presented to the Secretary of State for a decision. The Secretary of State may set a different funding band to our recommendation.

Step 9. Continuous improvement

We compile information about apprenticeship training and assessment costs. We plan to share findings regularly to increase understanding of apprenticeship costs and assist the Department for Education with monitoring the affordability of the apprenticeship programme.

4. Completing the pilot trailblazer data form

You must submit evidence to us to inform the funding band recommendation by completing the pilot trailblazer data form.

The pilot trailblazer data form must include information and evidence that you believe to be an accurate reflection of current high quality training delivery within the sector. We recommend that you consider typical training delivery and consider the evidence you may require alongside the development of your occupational standard.

Further guidance for completing the forms can be found by speaking to your PM.

The completed pilot trailblazer data form must be sent to us when you submit your EPA quote and EPA plan.

5. Challenging a funding band recommendation

We will consider all the evidence you provide when we make our funding band recommendation and engage with trailblazer groups as necessary throughout our moderation and verification. Where submitted evidence does not meet our requirements we will explain this to you and, if necessary, you will be invited to submit additional or alternative evidence. We will advise you of our funding band recommendation, once the compliance board, a sub-committee of the Institute’s board, approves the funding band recommendation.

When you are notified of our funding band recommendation you will have two choices.

  1. You may agree that the funding band recommendation can proceed to be considered by the Secretary of State. As indicated above you will have opportunity to submit additional trailblazer contextual information. If you do submit that further information it will be sent to the Secretary of State for consideration alongside our funding band recommendation and Sector Report. The Secretary of State will then proceed to make a funding band decision.
  2. If you feel as though a material procedural error or other material irregularity has occurred as part of our funding band allocation process, you may wish to consider seeking procedural review of our decision. If so, you must notify the Institute within 10 working days of your intention to seek a procedural review. Full details of procedural review can be found on our website.

If you do seek procedural review, the funding band recommendation will not go to the Secretary of State (or their delegate) for a decision until the procedural review has concluded (and, where a procedural review is granted, only after a fresh decision is made). You will have the opportunity to submit additional trailblazer contextual information when it does get forwarded to the Secretary of State for a decision.

6. Funding bands when you revise your occupational standard and/or EPA plan

After an apprenticeship is approved for delivery, it might be necessary to revise or amend the occupational standard and/or the EPA plan. Depending on what those changes are, we might need to recommend a new funding band. You should discuss any changes with your PM.

If a new funding band recommendation is needed, we will use the same approach as we do when setting a funding band for a new standard. (see section 2 above).

It is important to note that if a new funding band recommendation is made, the funding could be lower, the same, or higher than the current funding band assigned to the apprenticeship. If we recommend a new funding band it will be based on the same 30-band structure used in all funding band recommendations.

Some common scenarios are set out below.

A new funding band recommendation will typically be made if there is:

  • A change of duration of six months or more
  • A mandatory qualification is added or removed
  • A change of level in the apprenticeship
  • The apprenticeship is split into more than one standard
  • More than one apprenticeship is merged to make a new, combined apprenticeship
  • A change in entry requirements

Typically, a new funding band recommendation will not be made if there is only:

  • A change to list of Awarding Organisations offering mandatory qualification(s)
  • A change to external quality assurance arrangements
  • A change to EPA plans that do not affect how the EPA is conducted
  • An editorial change to improve clarity, or aid understanding
  • Amendments to the title of the apprenticeship, or title of any mandatory qualifications

We may or may not need to make a new funding band recommendation when there is:

  • an addition or removal of an option in a core and option apprenticeship
  • An addition, removal or change to the knowledge, skills and behaviours or duties

Further information about submitting revisions.

7. Funding forms

You can access both forms by following the links below. For guidance, examples of completed forms can be found in the second sheet/tab in the excel document of each form.

  • Pilot trailblazer data form (training delivery data collection tool for the pilot)
  • End-point assessment organisation quote form (EPA data collection tool)

These funding forms will be made available to trailblazers participating in the pilot.

8. Resources

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