A new scheme of financial incentives for apprenticeships was introduced on the 1st of August 2020. This was put in place as an incentive for employers to hire new apprentices. When the scheme was introduced it was originally only meant to last until the 31st March 2021, but it has now been extended due to its success. Originally, if an employer hired an apprentice aged 25 and above, they would receive a payment of £1500. There was a £2000 incentive if the apprentice was aged 16-18 or under 25. However, if the apprentice is either aged 16-18 or under 25 with an education, health and care plan, or who have been in the care of their local authority. They will be eligible for an extra £1000 incentive payment.
All payments will be received in 2 equal instalments. The first payment will come through after 90 days of the apprentice’s start date. This will be 50% of the whole payment and then you will receive the other 50% after the apprentices completed 365 days of their apprenticeship.
To able to qualify for the grant apprentices must be in full-time employment as well as undertaking their apprenticeship off the job learning. There must be evidence for this in an individualised learning record. There is also a procedure put in place if an apprentice is made redundant. If this is the case, they can still be eligible as long as they are a new employee of your organisation. To get the second instalment the apprentice must have a least one year of training left to complete.
Not only is the financial incentive programme being extended for another 6 months, but it is also increasing to payment of £3000 for each new apprentice, regardless of age. This will still be on top of the regular £1000 for apprentices aged 16-18 and under the age of 25 who have an education, health and care plan, or who have been in the care of their local authorities. This means some employers could receive up to £4000 in total for hiring an apprentice.
These changes have been made to benefit more people; a better incentive for employers, and a boost to opportunities for anyone looking to gain new qualifications, as well as for many young people and school leavers.
The Chief Executive of the Association of Employment and Learning Providers, Jane Hickie, said that the financial incentive boost could potentially be “Game-changing” and will prove to be “particularly attractive to smaller businesses.”
Removing the age limit opens doors for employers and apprentices alike. Many would recognize that apprenticeships are mostly associated with younger people, however, they are for all ages. Anyone can develop their knowledge and learn new skills, and apprenticeships are the perfect way to do this, no matter your age.
These new plans will allow individuals to be linked to an agency rather than to a single employer, allowing them to perform multiple roles in more than one business sector. This will target industries with more flexible working patterns and will allow these sectors to spend more of their levy fund and have a stronger impact.
Flex-job apprenticeships are expected to begin in January 2022, but the Treasury announced that, as of July 2021, employers will be eligible to bid for money from the £7 million funds to set up new agencies.
The flexi-job proposal is based on the idea of portable apprenticeships, which was brought forward by the Chancellor in his last expenditure review. It is also believed that there will be an announcement in the near future about the potential of an additional £126 million to be added to the budget. This will be used to further increase the number of traineeships by an additional 40,000 in 2021/22. This budget will include £22 million to continue the employer incentive payment of £1,000 and the use of £111 million to try to triple the number of traineeships in the coming years.
The introduction of the changes to the financial incentive for the apprenticeships scheme is a great development in the apprenticeship industry. It is an inventive way to get employers more motivated to hire new apprentices. Many businesses will go against hiring an apprentice over a new full-time employee as they wish to provide tailored training, which is often costly. However, with these new incentives in place, it gives employers the opportunity to see what a difference having an apprentice on your team can lead to. With these changes, it allows employers to find apprentices that suit their company. Apprenticeships with Empentis are always tailored to the individual learner to ensure they build the skill set needed for the job. If you’d like any more information on apprenticeships, funding and courses, get in touch today.
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