Proposed funding model update
Following two rounds of public consultation, and testing, The Institute for Apprenticeships and Technical Education (IfATE) commenced the piloting of a new funding methodology in January 2022. This proposed funding model (PFM) was intended to be piloted for a period of 12 months.
In September 2022, IfATE published a consultation summary report and response document which captures stakeholder feedback to the second consultation and IfATE’s response to that feedback. The report sets out the key themes raised in consultation responses and provides an overview of the decisions which IfATE had made about the main features of the PFM.
Since the publication of this document in September 2022, we have continued to refine and iterate the PFM. These changes do not stray from the key decisions made in response to the second consultation but bring subtle enhancements and efficiencies to the model, based on our findings and feedback from stakeholders and participants. In some areas they amend the evidence and submission requirements for Trailblazers who will utilise the new model. To date we have made changes to the:
Published guidance
- provided further clarity about how we will calculate the typical tutor salary, and modified our approach to the evidence we expect from Trailblazers who seek an adjustment to IfATE's best estimate of typical tutor salary costs
- provided further clarity about how we will calculate the maximum contribution towards eligible provider ‘on-costs’
- provided further information about how we will seek expert insight to inform the funding development, moderation, and verification process
- provided further information about how we will make our recommendation, where the Trailblazer is unable to evidence higher costs within the required timeframe
Data collection tools
- refined the tools provided to Trailblazer groups to support the high quality submission of funding information
- made steps towards integration for funding development within the Apprenticeship Builder system, which we intend to implement by the end of 2023
Contextual information to inform Secretary of State (SoS) decision making
- refined the process for communicating our recommendation and any wider contextual information to the SoS, and their delegates, to inform decision making
Annexed to this note are full details of the changes that have been made to the PFM guidance and requirements since we published our consultation summary report and response document in September 2022.
Model fixed-rates
We continue to work towards undertaking a review of the fixed-rates of the proposed funding model. This work will inform any future changes to our proposed funding model’s fixed-rates and will help to ensure that IfATE’s funding band recommendations to DfE are robust
Pilot extension and evaluation
We have made the decision to extend our pilot by an additional 3 months. This extension to the pilot period will increase our understanding of the PFM by increasing the diversity of apprenticeship funding bands recommended by sector, level, and duration.
We intend to publish further details, including a pilot summary, in May 2023. After this point, and subject to final decisions being at the conclusion of the pilot period, trailblazer groups will continue to be required to follow the new funding band allocation model.
Annex – Full details of changes to the proposed funding model requirements and guidance
How we will calculate the typical tutor salary
Where our best estimate has been adjusted in line with published criteria for Trailblazer supplied evidence, we will calculate the typical salary using a 37 hour working week and a 52 week salaried year. We will use the lowest verified typical training delivery salary cost identified to make this calculation.
How we will calculate the maximum contribution towards eligible provider ‘on-costs’
Provider ‘on-cost’: Combines the legal minimum employer pension contribution of 3% for their employees with the typical employer National Insurance contribution 15.05%
New funding model calculation and explanation of rates
How we expect Trailblazers to evidence typical tutor salaries when seeking an adjustment to IfATE's best estimate of typical tutor salary costs
Category 1
- independent sector evidence of typical training delivery salary costs, for example a sector body report, economic report, academic paper etc
Category 2 (one from below)
a. Two paid invoices for tutor services relevant to the occupation from different training providers, from the last 12 months.
b. Anonymised PAYE data for gross salary paid to two individual occupationally relevant tutors from different training providers, from the last 12 months.
c. One paid invoice for tutor services relevant to the occupation, and anonymised PAYE data for gross salary for one occupationally relevant tutor. Each piece of evidence should come from a different training organisation, from the last 12 months
Category 3 (only if you can reasonably demonstrate why evidence category 1 cannot be met)
- wage information from three regions of England: in the form of advertised vacancies for the occupation from the last 6 months
Where evidence of typical salary costs to meet the required evidence categories does not exist, for example for niche or new occupations, and where genuine reasonable effort has not discovered all the required evidence, you should talk to us so that we can look at how a funding band recommendation can be made using the known available evidence.
How we will seek expert insight to inform the funding development, moderation, and verification process
We may arrange for a peer reviewer to provide expert comment on the training costs associated with your apprenticeship. The peer reviewer is chosen for their experience of the occupation or sector in which the occupation is found. You and the Route Panel will receive a summary of their comments.
In some cases, we will not seek advice from a peer reviewer. For example, where we already have adequate information to make a recommendation or where there is not a suitable peer reviewer
How we will make our recommendation, where the Trailblazer is unable to evidence higher costs within the required timeframe
You will be invited to submit any additional evidence before we make a funding band recommendation. You must inform us 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. We may agree to allow you additional time if you request it.
In the absence of the information being provided within our prescribed timeframe we will proceed to making a funding band recommendation using the typical costs identified by IfATE.
Proposed funding model guidance.
Journey - changes to the funding recommendation process
Commissioned research
A report was jointly commissioned by the Institute and DfE to add to the body of knowledge about apprenticeship standards and gain a better understanding of the actual costs of delivering apprenticeship training and assessment.
The research was designed to inform the work of both the Institute and the Department, including the design of a new approach to making funding band recommendations. The report captured a snapshot of the apprenticeships programme at that moment in time and has strengthened the Institute’s evidence base on the costs of delivery.