Apprenticeship incentives grow as skills drive gathers pace

The government has increased incentive payments for hiring a new apprentice as it looks to persuade more employers to take part in the scheme to drive the skills agenda.

The move means that employers will receive £3,000 for new apprentices of any age who join their organisation from April 1 until September 30 this year.

The incentive is in addition to the £1,000 they already receive for hiring an apprentice aged 16 to 18 or under 25 with an education, health and care plan or who has been in the care of their local authority.

HMRC has announced that you can apply for incentive payments for these apprentices from June 1 to November 30 this year.

The payment is different to apprenticeship levy funds, so you can spend it on anything to support your organisation’s costs.

For example, on uniforms, your apprentice’s travel or their salary. You do not have to pay it back.

Eligible employers can apply for the incentive payment after they add new apprentices to their apprenticeship service account.

Previously, firms in England received £2,000 for a new apprentice aged under 25, and £1,500 for those over 25, in addition to a £1,000 grant.

A statement announcing the move on the GOV.UK website said: “Apprenticeships will be more important than ever in helping businesses to recruit the right people and develop the skills they need to recover and grow – both now and in the long-term.

“Due to the economic impact of the coronavirus (Covid-19) outbreak the government has introduced incentive payments for hiring a new apprentice to help organisations offer new apprenticeships.”

Quoted in FE Week, Association of Employment and Learning Providers chief executive Jane Hickie said the incentives boost could be a “game-changer” and prove to be “particularly attractive to smaller businesses”.

The government has also reset reservation levels for employers who do not pay the apprenticeship levy.

It says this will enable employers to make up to 10 new reservations to fund new apprenticeship starts in the financial year 2021-22.

It has also launched a consultation exercise with the aim of creating new flexible apprenticeships in sectors such as agriculture, construction and the creative industries.

How the incentive payments work

Employers will get the payment in two equal instalments. They will be eligible for 50 per cent of the payment 90 days after the apprentice’s start date, and the remaining 50 per cent after the apprentice completes 365 days of their apprenticeship.

The apprentice will need to be in employment and undertaking their apprenticeship at these times as evidenced in the Individualised Learner Record.