Before the apprenticeship levy changes in April 2017, employers contributed towards the costs of training programmes directly to their chosen training provider and the contribution made by the government depended on the size of the employer. Organisations with more than 1,000 employees were charged a higher fee for training and received a smaller government contribution.
“Generally, the size of the employer contribution was correlated with the amount that the government would pay towards the apprenticeship, with higher employer contributions indicative of a lower government contribution,” explains Nick Marler, head of communications at Buttercups Training.
Funding for pharmacy services training was readily available for two pharmacy apprenticeship frameworks at levels two and three — the Level 2 Certificate in Pharmacy Service Skills (dispensing assistant training) and the Level 3 Diploma in Pharmacy Service Skills (preregistration pharmacy technician training). Under the new funding system, there are implications for both small and large organisations.
“Employers need to make well-informed decisions that will strengthen the skills of their workforce as well as make best use of the financial resources or incentives to do so,” says Vanessa Kingsbury, managing director at Buttercups.
The changes and the new funding system
With apprenticeships now a devolved policy, each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training. Employers with operations in Scotland, Wales or Northern Ireland may want to contact their local apprenticeship authority.
The apprenticeship levy represents a new way of funding apprenticeship training in the UK and marks a major departure from the existing system. “In terms of smaller organisations, pharmacy owners and employers with a pay bill of less than £3m per year should see their employer contribution for apprenticeship programmes significantly reduced, especially for pre-registration pharmacy technician training,” explains Kingsbury.
According to Marler, it is difficult to provide an indication of the size of the reduction in employer contributions. “Before the levy, employer contributions were based on factors such as employee age, size of employer and previous qualifications, among others,” he says.
Source: Courtesy of Buttercups
“Allocation for this funding, however, is uncertain, pending a new round of applications for contract values with the Education and Skills Funding Agency (ESFA), so pharmacies should discuss their likely training needs directly with training providers,” he adds.
Kingsbury believes that, “in theory, training budgets will stretch further, providing the opportunity for pharmacies to strengthen and upskill their workforce in the face of the government tightening its belt”.
In contrast, larger organisations with a pay bill of more than £3m a year will be required to contribute 0.5% of their total annual UK pay bill towards a ‘levy pot’ each month. This money can only be used to fund apprenticeship training, and must be spent within 24 months of it being deposited into the pot.
An online calculator is now available for employers to calculate their monthly contributions.
Seizing the opportunity
“With funding effectively ring-fenced for larger employers, albeit through taxation, learning and development departments have an assured budget that they can use to develop existing staff, and recruit and train their successors,” comments Kingsbury. The new levy is also likely to encourage a shift towards apprenticeships beginning at the start of an apprentice’s career with an employer, rather than towards a temporary training arrangement.
“Once an employee achieves their apprenticeship, they should remain with an employer where a job opportunity continues to exist, and where the apprentice wishes to remain with them,” states Kingsbury. “Where this is not possible, pharmacy business owners or their employer and the training provider must support the apprentice to seek alternative opportunities,” she says.
Source: Courtesy of Buttercups
According to Kingsbury, fixed-term contracts for apprentices will no longer be workable under the levy. However, given the opportunity to train apprentices according to their employer’s requirements, there are benefits to taking a long-term view on the continued employment and development of apprentices within a pharmacy business or related organisation.
Pharmacies of any size can use the apprenticeship levy to upskill all eligible candidates, not just new apprentices. This includes existing staff members who hold a level 4 (degree), or higher qualification, and wish to undertake further study (for example, management training), provided that their prior degree is “materially different” from pharmacy services. However, according to Marler, the definition of “materially different” is open to interpretation in the guidance.
“Training providers can advise on this but essentially learners can embark on additional qualifications as long as there isn’t significant overlap with existing learner skills, knowledge and behaviours,” says Kingsbury. This rule change may enable existing members of staff to be reconsidered as possible apprenticeship candidates without a set upper age limit.
Pharmacy organisations employing 16–18 year olds will also be eligible for an additional £1,000 payment paid in two parts: the first at 90 days; the second at 365 days.
Functional skills training
There are also other benefits for larger organisations that are required to pay the apprenticeship levy. Government funding for functional skills training is available for any candidate who is not exempt. A guidance document has been developed by the designated certifying authority, Apprenticeship Certificates England, which sets out the criteria for exemption and eligibility.
In addition, funding for mathematics and English will not be deducted from an employer’s account on the Digital Apprenticeship Service, an online service that allows employers to choose and pay for apprenticeship training. However, it should be noted that the Digital Apprenticeship Service is only relevant to levy-paying employers. “Employer registration is required to find accredited training providers and assessment organisations, pay for training and assessment, and find external candidates who are seeking apprenticeship training,” Kingsbury explains.
It is important to note that data held within an employer’s digital account must correspond with the data submitted to the government by the training provider. This includes start dates, withdrawal dates, or breaks in learning dates. Thorough communication between the employer and the training provider (see box 1 for more information on training providers) is essential to ensure the prompt release of funds. A useful guide to the apprenticeship service has been produced by the Education and Skills Funding Agency to help organisations.
Box 1: Training providers
Training providers are subject to robust and rigorous inspections by the Office for Standards in Education (Ofsted), a non-ministerial department which inspects and regulates services that provide education and skills for learners of all ages. This ensures the following for all learners: safeguarding arrangements; training related to identifying and preventing radicalisation and extremism; and the integration of British values. Failure to provide evidence for this will result in the removal of the provider from the Register of Training Organisations.
Once a training provider has been identified, employers are advised to check the provider:
- Has a delivery model that works for them;
- Has sound financial health;
- Is able to provide evidence of quality and is able to deliver.
It is important to be wary of training providers who offer large discounts; there should be no ‘wriggle room’ when maintaining quality delivery of training that complies with Ofsted. Inducement arrangements (kickbacks/cashbacks) from training providers are strictly forbidden by the ESFA.
Off-the-job training requirements
Under the new levy, apprentices will need to spend at least 20% of paid working hours on off-the-job training. Examples of off-the-job training can include online learning, practical training through shadowing and mentoring, alongside learning support and time spent completing assessments and assignments. “Apprenticeship training is distinct from assessment,” explains Marler. Off-the-job training reinforces practical, work-based learning with technical and theoretical learning. “The focus of off-the-job training is on teaching new skills rather than assessing existing skills,” he adds.
There is no set deadline for deciding when this off-the-job training must be completed, which allows time for individuals to develop a plan for how to make best use of this study time. Employers or pharmacy owners who have a number of apprentices should consider the benefits of developing monthly or quarterly training events, which provide opportunities for apprentices to collaborate. As Kingsbury points out, movement of apprentices between different learning areas could also be a positive way to widen the scope of the apprenticeship, while still adhering to apprenticeship rules.
However, pharmacy business owners and employers need to note that off-the-job training cannot be completed outside of the apprentices’ working hours. Functional skills training such as mathematics and English cannot be counted towards the 20% off-the-job training time, but time does need to be given to the apprentice for this during working hours. “Essentially, functional skills needs to be completed during working hours, but the time given by the employer will not be recordable as off-the-job training,” says Marler.
The funding rules state that apprentices must not be asked to contribute financially to the direct cost of learning or assessment — including when an apprentice leaves the workplace — and contracts which state that the learner will be charged for the course upon leaving will no longer be allowed. Pharmacy business owners and organisations should be aware that it is both important and beneficial for a good professional relationship to develop between the employer and the apprentice. This relationship will likely be enhanced during cooperative off-the-job training sessions resulting in a low rate of attrition. According to Marler, a possible reason for this is that apprentices are less likely to look for opportunities elsewhere if they are enjoying their apprenticeship.
The apprenticeship levy represents plenty of change but several good opportunities exist where organisations can develop apprenticeships that work best for them. “With the cuts that we have seen to the sector, pharmacists need to think of ways in which to increase cost effectiveness and the apprenticeship programme is one such method,” says Marler. “With a little investment, you can train staff to be champions of your business.”
Pharmacy business owners and employers should review the changes to the new apprenticeship levy to find out how their organisation will be affected. Further information can be found below:
- Step-by-step guide to the apprenticeship service
- Digital apprenticeship service
- Exemption and eligibility of apprenticeship candidates
- Employer monthly contribution calculator
- Apprenticeship funding and performance management rules
- Apprenticeship off-the-job training: Policy background and examples
- Apprenticeship authority for Scotland
- Apprenticeship authority for Wales
- Apprenticeship authority for Northern Ireland
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