Guidance

MIN 678 (M) Amendment 1: Enhancement to the Current Support for Maritime Training (SMarT) Fund and Additional Support for Junior Officers

Updated 7 December 2023

This MIN has been extended to 31 March 2025. Therefore the dates have been amended throughout the Marine Information Note to reflect the commitment to the additional funding up until this date.

Summary

Work carried out within the Maritime Skills Commission (MSC), Cadet Training and Modernisation (CT&M) Programme has led to a proposal for a new strategy to both administer and monitor the success of the SMarT scheme.

The Tonnage Tax reforms, announced by the Chancellor in October, provided an opportunity for the Department to introduce changes to Tonnage Tax training requirements within the powers already delegated to the Secretary of State by HM Treasury under The Tonnage Tax (Training Requirement) Regulations 2000. These proposed changes cover the interim period from April 2022 to March 2025 and ensure an increase in funding of Cadet training to 50% from the current level of 30%.

SMarT funding proposals set out in this MIN are available to be claimed through sponsoring companies who meet the criteria set out in MGN 455, regardless of whether or not they use the UK’s Tonnage Tax scheme.

This MIN details a new, simplified mechanism to assist industry, increase UK Cadet numbers and improve the financial support available for UK Junior Officers to help them obtain their first Management level (unlimited) Certificate of Competency (CoC). In addition, the MCA aims to make funds available for those UK Junior Officers who have already gained an Operational level (unlimited) CoC but are not currently able to benefit from the SMarT scheme to assist them in qualifying for a Management level (unlimited) CoC and progress within the industry.

1. Introduction

1.1. The enhancement to the current SMarT Funding scheme comes into effect from the 6th September 2022 and will increase SMarT payments to cover up to 50% of the training costs for Cadets currently enrolled on an MCA approved Cadet training programme, or enrolling after this date, and studying towards an academic qualification of level 4, or above. Noting that all academic levels mentioned in this MIN are referencing the framework in England, Wales and Northern Ireland. The equivalent academic level in the Scottish academic framework must also be met. The funding will also cover part of the training costs incurred by ship owners/operators supporting a newly qualified UK Junior Officer to their first Management level (unlimited) CoC.

1.2. These proposed changes cover the period from April 2022 to March 2025 and ensure an increase in SMarT funding to 50%. Following this, a new UK funding system is scheduled to be implemented, as recommended by the 2021 Maritime Skills Commission Seafarer Cadet Training Group’s Report. Therefore, the rate increase will be payable for all Cadets currently enrolled in the system at the 50% rate and claims can be backdated to 28th March 2022[1].

1.3. The MCA aims to provide a simplified scheme that will assist in increasing Cadet numbers and supporting UK Junior Officers to their first Management level (unlimited) CoC. Success will be linked to data taken from across the industry rather than relying on individual owners/operators to commit to increases. When analysing data to measure success the MCA will take a holistic approach across industry to review if Cadet numbers have risen and ensure the uptake of the financial support for Junior Officers towards obtaining their first Management level (unlimited) CoC is being made use of.

1.4. It is expected that sponsoring companies increase the support payments to Cadets in line with the rate increases. This will help ensure future success of the scheme through benefitting the Cadet in line with UK Subsidy Control Principles.

2. Definitions

2.1. Sponsoring Companies can be either:

• SMarT Companies (shipping companies acting alone, responsible for recruiting and sponsoring their own trainees); or
• SMarT Consortiums (trainee management companies representing their client companies (shipping companies and charities), recruiting trainees and claiming SMarT on their behalf).

2.2. UK Junior Officer: This is a seafarer who holds a UK Operational level (unlimited) CoC and is working towards a UK Management level (unlimited) CoC, as defined in MSN 1856 or 1857, and is resident within the UK. These include:

• A holder of a UK issued Officer of the Watch (OOW) (unlimited) CoC.
• A holder of a UK issued Engineer Officer of the Watch (EOOW) (unlimited) CoC.

2.3. To qualify for any payments set out in this MIN, a UK Junior Officer must meet the same eligibility criteria for SMarT trainees that is set out in MGN 455 (section 8.1) and MIN 486 (section 4.2), or subsequent publications.

3. Validity of the MIN and Proposal

3.1. This new scheme is planned to cover funding for the current financial year, and the period up until 31 March 2025. However, any successes and lessons learned from this proposal will assist in the creation of the future funding plans currently being developed as part of the MSC’s CT&M Programme and other funding or financial incentive reviews being undertaken by the Department for Transport (DfT). Any Cadet enrolled during this period (up until 31 March 2025) will be eligible to claim additional payments towards their Operational level (unlimited) CoC.

3.2. Anyone commencing their seagoing service towards their Management level (unlimited) CoC before 31 March 2025 will also be eligible for the payments outlined in this MIN. Sponsoring companies must notify the MCA prior to each Junior Officer undertaking the training, or seagoing service: smart@mcga.gov.uk.

Sponsoring Companies with Cadets or UK Junior Officers currently enrolled on the SMarT Plus Scheme should refer to section 11 of this MIN. SMarT Plus is being replaced by this enhanced scheme.

3.3. To qualify for any payments in this MIN, Cadets and Junior Officers must meet the same trainee eligibility criteria requirements set out in MGN 455 (section 8.1) and MIN 486 (section 4.2), or subsequent publications.

4. Cadets Currently in the System and Enrolled Prior to this MIN Coming into Force)

4.1. Sponsoring Companies will be able to claim at the new rate, backdated to the 28th March 2022, for all Cadets currently in the system prior to this MIN coming into force.

• First year Cadets (50 weeks 1-50): £170 per instalment;
• Second year and third year Cadets (100 weeks 51-150): £210 per instalment;
• Final Payment on production of a UK Operational level (unlimited) CoC £4,500.

4.2. The new rate (50%) will be available to claim for all Cadets via the portal from 1st of September 2022. Claims should be submitted as normal as the rate increase will be added to the claims portal.

4.3. Balancing claims for Cadets currently in the system who enrolled prior to 29th of August 2022 can be submitted from 1st November, noting that they should claim from 28th March 2022 to the 28th August 2022.

4.4. Further details relating to claims periods, when to claim and how to claim will set out in an Aide Memoire available on request from the MCA.

5. Enhanced Payments for Cadets

5.1. Any Cadet meeting the requirements set out in MGN 455, or subsequent publication, enrolling or currently enrolled on a course at an MCA approved nautical college for an MCA approved academic qualification of level 4[2], or above, will be eligible to receive 50% of the associated training costs.

5.2. To confirm, enhanced payments in this section will be payable to:

• Those Cadets following an MCA Approved level 4 or above qualification that leads to the following unlimited CoCs: OOW, EOOW and Electro Technical Officer (ETO).
• Those Cadets following MCA Graduate Engineering Routes (as per MIN 511) leading to an EOOW (unlimited) CoC or an ETO Equivalent Scheme.

5.3. To clarify, accepted level 5 and above qualifications include, but are not limited to:

• An MCA approved Foundation Degree;
• An MCA approved Scottish Professional Diploma (SPD);
• An MCA approved Honors Degree;
• An MCA approved Advanced Diploma or Higher National Diploma (HND).

5.4. Accepted level 4 qualifications include, but are not limited to:

• MCA approved Advanced Certificate or Higher National Certificate (HNC).

5.5. Sponsoring Companies who make use of SMarT funding will automatically change over to the new rate. The Aide Memoire details the new forecasting requirements.

The Administering Body (AB) for SMarT will increase payments for all Cadets undertaking an academic qualification of level 4, or above, to the 50% funding rate, from the 1st of September 2022. The weekly instalment and one-off payment rates will be:

• First year Cadets (50 weeks 1-50): £170 per instalment;
• Second year and third year Cadets (100 weeks 51-150) £210 per instalment;
• Final Payment on production of a UK Operational level (unlimited) CoC £4,500.

5.6. SMarT 2 payments detailed in MIN 486, or subsequent publications, will still be available to those on this route as they cover the college based, academic, training required towards a Management level (unlimited) CoC.

5.7. Please refer to section 7 of this MIN for details regarding the measuring of success.

5.8. Payments are based on providing 50% of the average cadet training costs of £68,000. Where companies are unable to demonstrate that they provide an average level of financial support to their cadets of at least within 5% of this amount (£64,600), the MCA may need to complete a balancing claim to ensure that the 50% financial support threshold is not exceeded. To avoid this, companies could boost their Cadets training allowance to ensure they meet the threshold.

6. Support towards the Management level (unlimited) CoC for Newly Qualified Junior Officers

6.1. Through stakeholder engagement, the MCA has established that the employment of UK Junior Officers requires a considerable amount of resources and investment. The MCA aims to support industry by covering up to 50% of the costs of training and support[3] of UK Junior Officers, with a cap of up to £6,000. This will assist UK Junior Officers to progress to a Management level (unlimited) CoC.

6.2. Training and support costs must be justified in accordance with section 8 of this MIN. Sponsoring Companies will act on behalf of UK Junior Officers to assist them in obtaining their Management level (unlimited) CoC and draw down on these payments. These payments are known as Officer Training Payments (OTPs) and can only be claimed for UK Junior Officers commencing their seagoing service from 1st September 2022.

6.3. The Sponsoring Company must have a process in place to ensure that seagoing service can be provided by either the SMarT Company or Consortium or a third-party seagoing service provider(s). A copy of this process and any agreements with a third-party provider must be retained for audit purposes (please see section 10 of this MIN for further information).

6.4. Where a Sponsoring Company uses third-party seagoing service providers, the Sponsoring Company will claim SMarT funding and, if required, reallocate the payments to a third-party for seagoing service, as appropriate, in proportion to the amount of seagoing service provided.

6.5. Payments will be awarded to UK Junior Officers working towards their Chief Mate or Second Engineer (unlimited) CoC as follows:

• Up to £2,000 on production of evidence of a UK Junior Officer’s first 3 months of seagoing service;
• Up to £2,000 on production of evidence of a UK Junior Officer’s first 12 months of seagoing service;
• Up to £2,000 on production of a UK Junior Officer’s first UK Management level (unlimited) CoC.

6.6. ETOs: Due to the training costs associated with taking on a newly qualified ETO, the MCA will allow for the first payment (£2,000) to cover up to 50% of the training costs of an ETO. Sponsoring Companies will need to adhere to the requirements set out in this section to be eligible for this first payment. The OTP payment will be made after the Sponsoring Company has submitted evidence of the 3 months’ seagoing service requirement.

6.7. SMarT 2 payments prescribed in MIN 486, or subsequent publications, will still be available and will be made in addition to the OTPs in this section of the MIN. SMarT 2 Payments cover the college-based, academic, training required towards a Management level (unlimited) CoC.

The Officer Training Payments (OTPs) Process

6.8. OTP funding should be claimed at the same time as submitting the monthly claims for SMarT, in accordance with the Annual Payment Schedule.

6.9. The AB will approve OTPs to Sponsoring Companies who have entered into an agreement with the MCA to support the costs of approved training up to the maximum limits set out in this MIN, section 6.1, and MIN 486, section 5.2. OTPs will be paid in arrears every four to five weeks, in accordance with the payment schedule defined by the MCA. OTP claims cannot be made in advance and must be claimed in arrears.

6.10. Sponsoring Companies wishing to draw down on this funding to support the training of UK Junior Officers must submit a proposal setting out how this will subsidise training costs to at least 50%. They should refer to section 8 of this MIN when completing the proposal. Claims will be made through a process that will be agreed between the MCA, AB and the Sponsoring Companies. Further details relating to this process are available in an Aide Memoire available from the MCA.

6.11. Companies cannot make an OTP claim prior to the MCA approving their submission.

7. Evidence Required to Demonstrate Incentive Effect and Success of the Scheme

7.1. The MCA will need to see an agreement in principle from Sponsoring Companies detailing how they are working towards increasing Cadet numbers and/or providing training support for more UK Junior Officers. This should be provided in the form of a letter acknowledging the bullet points set out below. Success will be monitored holistically across the industry, as opposed to singling out Sponsoring Companies.

7.2. Commitment will be sought from Sponsoring Companies to:

• Attend biannual review meetings where data will be provided by the MCA to assess the effectiveness of the new proposal, discuss lessons learned and share best practice.
• Agree, in principle, to work to increase Cadet numbers and assist those applying for their UK Management level (unlimited) CoCs.
• Provide justification of training costs as per section 8 of this MIN.
• Where possible, provide data to the MCA to show evidence of the success of this proposal and/or provide feedback to shape future policy and ensure success.
• Agree to be audited against the criteria set out in this MIN. An Aide Memoire will set out the process and details of what evidence will need to be held and made available from the MCA on request.

8. Justification of Training and Support Costs

8.1. Any Sponsoring Company wishing to claim the OTPs towards the UK Management level (unlimited) CoC will need to provide evidence of the associated training and support costs required for UK Junior Officers. This may be in the form of time spent in training, onboard or onshore, or actual costs for any relevant training courses and associated materials. These may include, but not limited to:

• Shipboard familiarisation costs;
• Onboard safety training that is additional to mandatory drills;
• Any company specific shore-based training costs, including travel and accommodation;
• Any ‘type specific’ equipment shore based training;
• Any shore based STCW or non-STCW training specific to the operational requirements of a ship[4].
• Human Resource and Administrative costs related to supporting officers to complete their training;
• The travel costs associated with getting a UK Junior Officer to and from a ship to allow them to complete the required 12 months seagoing service for their first Management level (unlimited) CoC.

8.2. The MCA will work with Sponsoring Companies to calculate the training and support costs so that once a submission is accepted it does not need to be resubmitted for each UK Junior Officer. Companies cannot make an OTP claim prior to the MCA approving their submission.

8.3. Sponsoring Companies will be required to record evidence that the first 3 months seagoing requirement has been met, and this must be submitted to the MCA. The Aide Memoire details the process and requirements for this.

9. Payment Approach for Self-Funded Junior Officers

9.1. Overview

9.1.1. The MCA are making funding available to UK Junior Officers who are working towards their Management level (unlimited) CoC without the financial support of their employer. They may also be entitled to the OTPs set out in section 6 if they have not commenced any seagoing service as a Junior Officer prior to 1st September 2022.

9.1.2. These individuals would normally self-fund the outstanding training and education elements required for their Management level (unlimited) CoC. Drawing on equivalent funding allowances from the SMarT 2 scheme (MIN 486), the MCA will cover up to 50% of the costs required to complete the outstanding academic training and education elements required for a Management level (unlimited) CoC. Candidates interested in this route would need to register with a Sponsoring Company who will be able to claim the instalment payments in arrears, as per section 5 of MIN 486.

9.1.3. The following funding is available:

• Up to £9,303 for those who hold an academic qualification below level 5 (HNC); OR
• Up to £4,743 for those who hold an academic qualification of level 5, or above (FD/HND etc), but are required to complete:
  • The additional training and ancillary courses set out in MSN 1856, section 10 and MSN 1857, section 6; and
  • MCA written exam(s) and an Oral exam; OR
• Up to £2,463 for those who hold an academic qualification of level 5, or above (FD/HND etc), but are only required to complete:
  • an MCA written exam(s) and Oral exam.

9.1.4. For this route only (Section 9.1 of this MIN), separate approval is not required for MCA approved nautical colleges to deliver this training. They may use Classroom, Distance, Online and Blended methods of delivery of:

• MCA approved educational ‘Top Up’ to a Level 5 academic qualification (the HND Standard);
• Written Examination Preparation[5]; or
• Oral Examination Preparation Courses2.

9.1.5. All of the required education and training listed in section 9.1 (including NAEST (M)), must be undertaken at an MCA approved college; with the exception of Medical Care, HELM (M) and High Voltage (M) Training[6].

9.2. Funding Availability:

9.2.1. These funds will be made available on a first come first served basis with a cap of £1 million per annum. However, if uptake is positive, more funding will be sought.

9.2.2. UK Junior Officers wishing to access these funds must approach a Sponsoring Company who will administer this funding on their behalf.

9.3. How to Claim

9.3.1. Claims must be made through an MCA approved Sponsoring Company and the process is detailed in the Aide Memoire. The claims process will be agreed with the MCA, the AB and the relevant Sponsoring Companies which will be available from the MCA on request.

10. Subsidies – SMarT

10.1. With effect from 1st January 2021, EU State aid rules no longer apply with limited exceptions such as the Northern Ireland Protocol. The UK needs to comply with its international obligations including the Trade and Co-operation Agreement with the EU and the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM)[7]. Schemes and subsidies of £500,000 or more need to be reported on the BEIS Transparency database. The Subsidy Control Act 2022, due to come into force late 2022/early 2023 will introduce new requirements for certain subsidies including lower transparency thresholds.

10.2. SMarT Companies or Consortiums must keep accurate records of their trainee numbers and claims must be broken down into individual client companies for each claims period. This is mandatory to comply with the requirements for claiming Subsidies. Records must be retained for 10 years after the last claim made.

10.3. SMarT Companies or Consortiums, including any client companies, must be aware that the financial threshold for an individual (single) award under a subsidy scheme, such as SMarT, is currently £500,000 in any Financial Year from 1st January 2021. Where this occurs, the MCA must report the award to BEIS – known as Transparency Reporting. This threshold is likely to be lowered in line with UK Subsidy Control Act.

10.4. SMarT Companies or Consortiums must inform the MCA in advance where this threshold is likely to be exceeded. Records must be maintained and reported in Financial Years.

10.5. All SMarT Companies and Consortiums will be subject to an audit undertaken by the SMarT AB, to ensure compliance as per the current SMarT scheme requirements. In addition, the MCA may request information to ensure:

• Accountability and fairness of the scheme;
• Statistical data to show incentive effect as demonstrated by increased numbers of Cadets and Junior Officers participating in the scheme.
• Compliance with the Rules and Regulations for UK Subsidies (i.e., a system is in place showing that spend is being monitored by the SMarT Company or Consortium).

11. Cadets Currently Enrolled on the SMarT Plus Scheme

11.1. Existing SMarT Plus Cadets will automatically move across to the new rate. Therefore, no action is required from Sponsoring Companies. The Aide Memoire will explain how to submit amended forecasts for the new rates for these Cadets.

11.2. The MCA has removed the mandatory requirement for Sponsoring Companies to support SMarT Plus UK Junior Officers towards their Management level (unlimited) CoC providing that they adhere to section 7 of this MIN. This will enable them to draw down on funding outlined in section 6.1 of this MIN and aims to incentivise shipping owners or operators to take on UK Junior Officers, by reimbursing the associated training costs.

11.3. SMarT Plus UK Junior Officer currently completing seagoing service towards their first Management level (unlimited) CoC will still be eligible for the £4,000 claims under SMarT Plus; on completion of 12 months seagoing service, on production of an NOE (£2,000) and on obtaining their first Management level (unlimited) CoC (£2,000). Although for any SMarT Plus UK Junior Officers who have not commenced their seagoing service prior to the 1st September 2022, sponsoring companies should refer to the funding options set out in section 6 of this MIN.

More information

UK Seafarer Services
Maritime and Coastguard Agency
Bay 2/11
Spring Place
105 Commercial Road
Southampton
SO15 1EG

Email: exams@mcga.gov.uk

Website: www.gov.uk/mca

General enquiries: infoline@mcga.gov.uk

Please note that all addresses and telephone numbers are correct at time of publishing.

Published: September 2022

© Crown Copyright 2022

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[1] Noting that the end of the period falls on Friday 1st April 2022, Sponsoring Companies can claim the new rate from Monday 28th March 2022.

[2] All academic levels mentioned in this MIN are referencing the framework in England, Wales and Northern Ireland. The equivalent academic level in the Scottish academic framework must also be met.

[3] These are the reasonable travel costs associated with getting a Junior Officer to and from a ship to allow them to complete the required 12 months seagoing service for their first Management level (unlimited) CoC.

[4] This would only cover STCW training that is not mandatory or the issue of the CoC.

[5] This must be undertaken at an MCA approved college for this funding.

[6] Please refer to: https://www.gov.uk/guidance/uk-seafarer-careers-training-provision-and-information and scroll down to ‘Nautical Colleges’ to access the list.

[7] https://www.gov.uk/government/publications/complying-with-the-uks-international-obligations-on-subsidy-control-guidance-for-public-authorities