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February 10, 2012

£1,500 ‘incentive payment’ for small firms to take on apprentices

Small businesses are to be given a £1,500 ‘incentive payment’ to take on their first apprentice aged 16-24 as part of a raft of new financial measures to encourage businesses to recruit and train new staff, writes Simon Wicks.

The new funding is the latest stage in the Government drive to boost the economy by raising the number and quality of apprenticeships. Figures released at the end of January showed the number of apprenticeships started in England reached a record high of 457,200 in 2010/11 – up by 63.5 per cent increase on the previous year.

The package of measures announced this week offers more than £260 million of grants in three areas:

  • Incentive payment to small and medium-sized businesses: 20,000 payments of £1,500 to employers with up to 50 employees taking on their first apprentice aged 16-24; a further 20,000 grants for firms with up to 250 employees. Businesses can apply for up to three grants until March and initial enquiries can be made via online form on the National Apprenticeship Service (NAS) website or by calling the NAS on 0800 150 600.
  • Higher Apprenticeship Fund: £6 million available, to add to £19 million that has already funded 19,000 degree-level apprenticeships since 2010. The money is available to businesses working with training providers to offer Advanced Level and Higher Apprenticeships in sectors including aerospace, accounting, law, retail and renewable technologies. Businesses can apply through the Skills Funding Agency e-procurement website Bravo.
  • Employer Ownership Pilot: £250 million available over two years for employers working with training providers to design and deliver their own training programmes. Employers of all sizes and in all sectors can bid for funding up to 16 April, with a minimum application of £250,000 for small and medium-sized businesses. Employers can find out more on the UK Commission for Employment and skills website.

“Our mission is to put practical training on a level playing field with academic study, creating a highly skilled, creative workforce that can take on the best in the world,” said skills minister John Hayes as he announced the funding this week.

Business groups welcomed the initiatives, but urged the Government to make life easier for small firms by giving more information about apprenticeships, offering them greater flexibility in delivering training, reducing red tape and working with small employers to address local skills requirements.

A spokeswoman for the Department for Business, Innovation and Skills said that NAS had simplified its guidance and appointed a dedicated team to support small firms.

Jane Bennett, head of campaigns for the Forum of Private Business said: “While we welcome apprenticeship subsidies for those that go through the National Apprenticeship Service, we feel they should be extended to those who carry out in-house training, either through tax or subsidies.”