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The Chancellor Rishi Sunak visits various businesses in Wolverhampton
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Autumn Budget 2021: Apprentice bonus extended until 2022

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Rishi Sunak once again put apprentices and traineeship initiatives high on the Treasury's agenda, with many announcements leaked days before his Budget speech.  

27th Oct 2021
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The ‘Plan for jobs’ slogan has been a phrase Sunak has used throughout his tenure as Chancellor. While the Budget bingo followers didn’t stamp the phrase on their cards this time, the sentiment returned again in this Budget, with a £2.7bn increase in apprenticeship funding by 2024-25.

The flagship announcement to support a “high skill, higher productivity economy” was the pre-announced news that the £3,000 apprentice hiring incentive for employers had been extended until January 2022.

The Budget red book outlined that the government will continue to cover 95% of apprenticeship training costs for employers who do not pay the apprenticeship levy. 

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Following the National Living Wage and national minimum wage announcement of a 6.6 % increase for 23 and over, the Budget has also confirmed an increase in the rate for apprentices. 

From April 2022, the rate for apprentices increases by 11.9% from £4.30 to £4.81 per hour. 

The Budget overview flagged that many businesses are using apprenticeship schemes to fill ‘hard to fill’ positions; an example of this is the HGV driver shortage where the apprenticeship scheme is being used to train new drivers. 

Apprenticeship investment

The £2.7bn investment will deliver improvements to the apprenticeship system. To help hire new apprentices, there will be an enhanced recruitment service by May 2022 for SMEs. 

The government is also considering making changes to the provider payment profiles. This, the Budget red book outlines, will give employers more choice over how the apprenticeship training is delivered and another consideration is streamlining additional employer support payments so that they go directly to employers. 

A return on investment tool will also be launched in October 2022 which the government hopes will enable businesses to see the benefits apprentices bring to their organisation. 

Pre-announcements

Even before Sunak took to the dispatch box today, he had already announced a number of employment based initiatives in a PR blitz to drive his plan for jobs ambitions. 

Earlier this week, the government previewed the Budget by pledging £1.6bn over three years to introduce new T-levels for 16-19 year olds. It also tried pushing ‘skills revolution’ as an early Budget buzzword with the pre-Budget announcement of £550m for adult skills.  

The adult skills investment will fund ‘skills boot camps’ for adults with no qualifications beyond GCSE level. 

Pre-Budget announcements

The Chancellor’s plan for jobs campaign actually started in Manchester at the Conservative party conference when Sunak extended his flagship Kickstart scheme by three months. The scheme will now come to a close on 31 March 2022, instead of the original 31 December cut off date.  

The £2bn kickstart scheme was unveiled at July 2020’s summer statement. The scheme was initially fraught with bottlenecks as employers were required to make applications for a minimum of 30 job placements.

It wasn’t until February 2021 that barriers were lifted for small employers and the scheme was open to employers of all sizes.  

At last March’s Budget, Sunak doubled the incentives handed to employers. The government pledged to then pay an employer who hires a new apprentice between 1 April 2021 until 31 September £3,000. This was an increase on the previous scheme's terms of £1,500 per new hire or £2,000 for those aged 24 and under.  

The £3,000 bonus to employers was also extended at the Conservative party conference as part of a £500m jobs support package. Employers now have until 31 January 2022 to take advantage of the apprenticeship bonus.

Replies (2)

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By Kate Upcraft
28th Oct 2021 10:36

Just be mindful skills are a devolved issue so most of these measures are only for England and it is for the devolved nations to decide how, or even if they want to promote upskilling

best wishes
Kate

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By Hugo Fair
30th Oct 2021 16:18

Does anyone have any SME clients who have used any of the Apprenticeship schemes (whether hiring incentives or training subsidies)?
Or are they only used by large employers (who anecdotally have the infrastructure to claim the funds and to deliver an effective apprenticeship environment)?
Another opportunity missed to help small businesses?

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