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Apprenticeship Reform

Apprenticeships in England are in the process of undergoing a dramatic transformation. As a result of Government reforms, a new style of apprenticeships has been designed to meet the changing needs of employers, learners and providers. The reforms involve radical changes to the basic design of apprenticeships, they put employers ‘in the driving seat’ in terms of designing apprenticeships and deciding how funding is spent.

View our Apprenticeship Levy Guides:

Wage bill under £3m

Wage bill over £3m

New Apprenticeship Standards

New Apprenticeship Standards will replace the old Frameworks. 

The Standards will:

  • Define an apprenticeship that lasts a minimum of 12 months
  • Be linked to a specific occupational level
  • Respond to employers’ needs, ensuring that apprenticeships are high quality and rigorous and develop the knowledge, skills and behaviour required for a specific job role
  • Be designed to prepare the apprentice for the (newly introduced) end-point assessment
  • Standards are created by groups of employers – known as ‘Trailblazers’.
  • There are no mandatory requirement for qualifications (unless they’re a requirement such as a Licence to Practice (LTP), or are written into the Standard by the Trailblazer group)
  • All apprentices will be required to develop their Maths and English skills
  • Apprenticeships will cover behaviours, as well as knowledge and skills
Introduction of End-Point Assessment

End-point assessment is being introduced as the main assessment method for all Apprenticeships.

It replaces the SASE model of continuous assessment and qualifications.

This new model separates training delivery and assessment. It allows employers and providers to focus on training and learning and helps the apprentice gain the maximum possible experience before they are assessed.

  • Assessment methods – The assessment plan will outline the assessment methods to be used by independent assessment organisations for the end-point assessment   
  • Grading – End-point assessment will be graded. It will determine that the apprentice demonstrates the level of knowledge, skills and behaviours required in the Standard
  • Delivery – End-point assessment will be delivered by an Independent End Assessor, from an assessment organisation which is on the Register of Apprentice Assessment Organisations (RoAAO)
Changes to Funding

There is currently an interim funding model in place for Trailblazer apprenticeships. Funding for current Frameworks remains unchanged.  

The long-term plan

Funding reforms are still under consultation. We know that the Government’s long-term plan involves different funding methodology depending on the size of the employer:

  • Employers with a paybill in excess of £3million will pay an apprenticeship levy from April 2017 (levy-paying employers)
  • Micro-businesses and SMEs (non-levy-paying employers) will continue to be funded through provider allocations for the next few years. For Trailblazer apprenticeships, this will be done using the interim funding model.

From 2017, providers will no longer receive direct allocations to fund apprenticeships for levy-paying employers. Instead, employers will have control over how money is spent, via a digital system, and providers will draw funds via their monthly ILR return.

The Government’s intention is that from 2020, non-levy-paying employers will receive funding directly in the same way as the levy-paying employers. However, these timescales are subject to change.

Quick Guide to the Apprenticeship Levy

The Government has committed to creating 3m apprenticeships by the summer of 2020. Changes to funding will be key enablers and the Apprenticeship Levy is the headline shift.

In simple terms the Levy will take control of current funding away from training providers and give it to employers.

This should empower you to shop around for the right expertise, quality and price for you, putting you in a stronger negotiating position, enabling you to get better value for money.

Why is the Government doing it?

One third of employers didn't offer their workers any training last year, so radical measures are needed. Historically, those who do invest in training run the risk of their highly skilled workforce being poached by competitors who don't make the investment.

This change aims to encourage all firms to make the investment required in apprenticeships so that skills gaps can be plugged quicker.

How will it work?

The Levy itself is only payable by businesses with wage bills over £3million. Most UK firms come below this and won't have to pay. Firms that do pay will contribute at a rate of 0.5% of their wage bill and will receive a £15,000 allowance to offset their payment.

If you do not qualify to pay the Levy, you won't need to use the digital apprenticeship service to pay for apprenticeship training and assessment until at least 2018.

In the meantime, from April 2017, you can agree a price with us. The Government will cover 90 per cent of the cost and ask you to make a 10 per cent contribution.

The government will fund 100% of the cost of apprenticeship training for a 16-18 year old for businesses with fewer than 50 employees.

All employers will receive an incentive payment of £1000 for employing a 16-18 year old apprentice. The training provider will also receive an incentive payment of £1000 for delivering apprenticeship training for a 16-18 year old

How to Calculate Your Levy Contribution

Key aspects of the levy include:

The levy will be 0.5% of an employer’s paybill which is in excess of £3million. It will be collected by HMRC, directly via PAYE process.

There is a £15,000 allowance, similar to PAYE tax allowance. The Government will top-up monthly funds for apprenticeship training by 10%.

No employer is exempt.

Levy examples:

1. Employer with a pay bill of £2,000,000

Levy sum: 0.5% x £2,000,000 = £10,000
Subtract Allowance: £10,000 - £15,000 = £0 annual levy payment (as total levy sum amounts to less than the £15,000 allowance)

2. Employer with a pay bill of £50,000,000

Levy sum: 0.5% x £50,000,000 = £250,000
Allowance: £250,000 - £15,000 = £235,000
After 10% top-up = £235,000 + £23,555 = £258,000 levy funds available to spend

2. Employer with a pay bill of £2,000,000,000 

Levy sum: 0.5% x £2,000,000,000 = £10,000,000
Allowance: £10,000,000 - £15,000 = £9,985,000
After 10% top-up = £9,985,000 + £998,500 = £10,983,500 levy funds available to spend

Read the Government’s SFA guide to the levy, March 2016.

How We Can Help You

With such dramatic changes to training funding and delivery on the horizon, we recognise things will get confusing.

Our aim is to support you through these changes and offer you the guidance and expertise you need to get the best value training solutions for you.

Keep an eye on our website to track the latest apprenticeship reform developments, call us anytime, or book an appointment and one of our experts will visit you and talk you through the changes.

We will carry out a training needs analysis in the context of the latest Government position and advise you about the best way forward, whether that is through apprenticeships, short courses, or a bespoke training programmes designed by us.

We will continue to provide the highest standard of training at the best possible price, flexing our delivery to suit your needs.

Using the Levy to Grow Management Capability

Apprenticeships are not just about young new starters to your business and they are certainly not restricted to learning a trade. 

Many firms do not realise that management staff at the highest level can become apprentices as part of a training contract to upskill – even up to the equivalent of master’s degree level.

This may be a smart way to make your levy digital credits work for you.

It can also help you succeed in planning for your next batch of potential managers.

Lincoln College currently runs the following ILM accredited leadership and management apprenticeships: 

Level 2 - suitable for team leaders in charge of small teams.

Level 3 - suitable for more experienced team leaders or supervisors responsible for around 15 to 20 staff.

Level 4/5 - Suitable for strategic leaders, r heads of departments with managers reporting to them.

Book an appointment with one of our training advisors to find out how you can use apprenticeships to upskill your current staff.

Training and Recruitment Services

Training and Recruitment Services

Take a look at the Training & Recruitment Services Guide for all the latest information.

Find out more 

Employer Enquiries

If you have an enquiry, please fill out our Employer Enquiry Form.

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