Plan for Jobs: Apprenticeships Update

Recognising the value that apprentices bring to the economy, the Government’s Plan for Jobs includes updates to apprenticeship funding policy, with incentive payments for employers who hire new apprentices. The deadline for these employer incentives has now been extended, and you will be able to claim £3,000 for each new apprentice you recruit before the end of January 2022.

The purpose of these incentives is to support employers to build capacity and capability following the disruption of Covid-19, while creating high quality opportunities for individuals and equipping them with skills that are in demand. We’ve put together a set of FAQs to explain how the apprenticeship incentives work and how your business can benefit from them.

1. Who can access the employer incentive payments?

The incentive payments apply to employers with a workforce in England who recruit an apprentice before 31 January 2022. Provided the eligibility criteria are met, there will be no limit on the number of incentive payments you can claim.

2. What payments am I entitled to?

You will be able to claim £3,000 per apprentice, regardless of age.

3. What are the eligibility criteria?

The eligibility criteria for these incentive payments are as follows:

• The apprentice must be a new employee to the business
• The apprentice must have a contract of employment starting on or before 31 January 2022
• The apprentice must not have been employed by the business within the six months prior to the contract start date

4. Do these incentives replace the additional payments already available for young apprentices?

No. Incentive payments are separate from – and therefore in addition to – payments that are currently available to help cover the costs associated with training a 16-18 year old apprentice, or an apprentice aged 19-24 who has previously been in care or has a Local Authority Education, Health and Care Plan (EHCP).

Employers who recruit apprentices in one of the above categories will continue to receive £1,000 in addition to the incentive payments. This means you could be eligible to receive up to £4,000 for each new apprentice you recruit.

5. How do I claim these payments?

Claims must be made through the apprenticeship service, so make sure you have an account set up. If you don’t already have an employer account, you can create one here.

The payment will be made directly to you in two equal instalments, where the apprentice is still in learning at day 90 and day 365.

6. What can I use the incentives for?

You can spend the incentive payments on anything to support your organisation’s costs, however we recommend using the additional funds to add value to the apprenticeship and enhance the learner experience, as this will benefit your business in the long term.

You could use the incentives for:

• Equipment and/or uniform
• Your apprentice’s travel costs
• Relevant licences (e.g. Fork Lift Truck licence)
• Additional training to support continuous professional development
• Subscriptions to relevant trade journals
• Memberships fees for professional bodies / industry associations
• Staggered bonuses for your apprentice for achieving milestones within the programme

7. What if my apprentice has prior qualifications?

As long as the individual gains substantive new skills, and the content of the training is materially different from any previous training or apprenticeship, they can undertake an apprenticeship programme at a higher, equal or lower level than the qualification they already hold.

All prior learning will be considered when assessing eligibility, but apprentices with existing qualifications will not be excluded from the payment of incentives.

8. I don’t pay the apprenticeship levy. Is there funding available for my business to train apprentices?

Even if you don’t pay the apprenticeship levy you can now create an account on the apprenticeship service and reserve government funding to cover 95% of the cost of apprenticeship training and assessment. The change – which came into effect in January 2020 – is a move away from government-procured contracts, and means you have greater control and flexibility over your apprenticeship choices.

The number of reservations available to you on the apprenticeship service at any given time has now increased from 3 to 10, so you’ll be able to access more funding for apprentices in this way.

Although most non-levy paying employers contribute 5% towards the cost of their apprentices’ training and assessment (known as co-investment), this fee is waived for businesses with fewer than 50 employees, as long as:

• Apprentices are aged 16-18
• Apprentices are aged 19-24 and have previously been in care or have a Local Authority Education, Health and Care Plan