The new changes of the financial incentives for apprenticeships scheme.

March 4, 20210

Apprenticeships scheme

The new changes in the financial incentives for the apprenticeships scheme.

On 1st August 2020, the government introduced a new scheme of financial incentives for apprenticeships to encourage employers to hire apprentices. Originally the scheme was supposed to end on 31st March 2021, but it has now been extended. The original scheme was for employers who hired an apprentice aged 16-18, under 25 with an education, health and care plan, or who have been in the care of their local authority. These employers were then permitted to receive a payment of £1000. They would also receive an additional payment of £2000 if they hired an apprentice in this age range. If an employer hired an apprentice aged 25 and above, they would still receive payment of £1500.

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The recent financial incentive changes

Not only is the financial incentive programme being extended for a further 6 months but it is also increasing to payment of £3000 for each new apprentice regardless of their age. This will still be on top of the regular £1000 for apprentices ages 16-18 and under 25 with an education, health and care plan, or has been in the care of their local authority. 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.”
The removal of the age restriction opens doors for employers and apprentices alike. Many will agree that apprenticeships are often commonly associated with younger people, however, they are for all ages. Anyone can expand on their knowledge and gain new skills, and apprenticeships are the best way to do this no matter your age.

How the financial incentives for apprenticeships work

All apprentices must be in full-time employment and undertake their apprenticeship to qualify for the grant. They must also provide evidence at these times in an individualised learner 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.

You will receive your payments in 2 equal instalments. After 90 days of your apprentice’s start date, you will be eligible for 50% of your payment and the remaining 50% after the apprentice completes 365 days of their apprenticeship.

The new Flexi-job apprenticeship

With these new plans, it will allow for individuals to be linked to an agency rather than a single employer, allowing them to take on multiple roles in more than one business sector. This will target industries with more flexible working patterns and will allow for these sectors to spend more of their levy fund and make a stronger impact.

The flexi-job apprenticeship is expected to commence in January of 2022, but the treasury announced that from July 2021 employers will be able to bid for money from the £7 million fund to create new agencies.

The flexi-job proposal builds on the idea of portable apprenticeships, which was brought forward by the chancellor at his last spending 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 traineeship numbers by an extra 40,000 in 2021/22.  This budget will include £22 million to continue the employer incentive payment of £1,000 and using £111 million on trying to triple the number of traineeships in coming years.

The new financial incentive for apprenticeships scheme is a great new development within the apprenticeship industry and is a great way to motivate employers to hire apprentices. This will allow employers to see the opportunities that having an apprentice on a team can bring and what different training avenues it can lead to. 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. But with changes like this, it will help to push businesses into finding apprentices that suit their company. Apprenticeships with Capital 4 Training 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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