Budget 2021: Employer skills

     

Increased incentives for employing new apprenticeships 


As anticipated and confirmed in part in the week before the 3 March Budget, the existing incentive scheme for apprenticeships in operation until 31 March 2021 has been expanded.

Incentives available to employers in England for hiring new apprentices have increased and the new incentives will be available until September 2021. Employers that hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new apprentice hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme. 

These incentives are in addition to the current funding available for certain new hires, meaning that employers could now receive £4,000 for taking on an apprentice aged under 19 and £3,000 for older apprentices.

Historically, similar incentives have been paid in two equal instalments; the first received after an apprentice completes 90 days of their apprenticeship and the second after completing 365 days. 

     

Traineeships


Additional monies have been made available to expand the availability of traineeships for 16 to 24 year olds. It is hoped that over 40,000 new traineeships will start with employers that provide trainees with work experience, funded at a rate of £1,000 per trainee.

     

A new Help to Grow scheme for SMEs focused on management skills and digital technology.


Two Help to Grow schemes are to be launched in Autumn 2021. The first one focuses on supporting upskilling 30,000 small and medium sized businesses (SMEs) with management skills to help those businesses grow - through training developed in partnership with industry, delivered through business schools over a 12 week period and  90 per cent subsidised by  the Government. The second scheme focuses on digital transformation through the adaptation of software to help transform the way SMEs do business, with funding available through a voucher scheme up to a maximum of £5,000 per business.

130,000 SMEs will be supported through the new Help to Grow scheme, providing the digital and management tools needed to innovate, grow and help drive recovery. 

     

‘Portable’ apprenticeships across different employers


The Government has set aside funds to create a ‘portable’ apprenticeship scheme enabling apprentices to work across a number of projects and employers as part of their apprenticeship, as opposed to working for one employer.

It is hoped that apprentices will benefit from the high-quality long-term training that an apprenticeship provides, possibly remove barriers for employers that may be unable to sustain an apprentice full time and provide employers with greater access to talent.

This scheme has, in recent weeks, been referred to as a ‘flexi-job’ apprenticeship.

Whilst there are apprenticeship training agencies currently in operation, this is a new arrangement with no known schemes already in operation, and employers will be, ‘invited to bring forward proposals here, and in particular the Creative Industries Council will be asked to do so in recognition of the potential benefits of this new approach for the creative sector.’

What impact this has on the employment status of apprentices, whether we will see an increase in apprenticeship agencies, and whether this applies to all industry sectors, will become clear in due course.

For more information, please contact

Susan Ball Susan Ball

Partner

James Whybrow James Whybrow

Associate Director