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Budget 2021: Apprenticeship incentive payments double to £3,000


The Chancellor has doubled the payments that employers receive to hire new apprentices of all ages, as the Budget increase support for traineeships and young people. 

3rd Mar 2021
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In today’s Budget, Rishi Sunak put apprenticeships at the centre of his coronavirus recovery plans by doubling the incentive payments handed to employers. 

Under the new plans, the government will pay an employer who hires a new apprentice between 1 April 2021 until 31 September £3,000.  

This apprenticeship bonus is an increase on the previous scheme's terms of £1,500 per new hire or £2,000 for those aged 24 and under. Unlike the previous scheme, today’s announcement is applicable for apprentices of all ages. 

These payments are on top of the existing £1,000 that employers get for all new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

The payments for employers who hire new apprentices is for employers in England. The Budget red book explains that where measures do not apply UK-wide, the devolved administrations will receive funding through the Barnett formula.

Portable apprenticeships

Additional funding of £7m will also be released by the government from July 2021 to enable apprentices to work across multiple projects with different employers. The government said that these portable apprentriceships will give employers access to a “diverse apprenticeship talent pipeline”. Employers will need to put forward proposals. 

In particular, the Creative Industries Council will be targeted for this scheme and will be asked to support the scheme as the fund will be beneficial for the creative sector. 

Claire Bennison, head of the ACCA UK, welcomed the apprenticeship money boost and the flexibility of the £7m fund, but added: "We are not convinced that a one-off payment of £3,000 is enough to incentivise employers to create and sustain new jobs at this time when the number of new apprentices is falling. Small businesses require longer term support, such as subsidised wages for new starters."

The Kickstart generation

Help for young people has been a long running theme throughout Sunak’s time as Chancellor. Back in the Summer Statement, he unveiled the kickstart scheme. It’s a scheme that lends its name to the ‘Kickstart generation’ that Sunak often references in his speeches. 

The £2bn kickstart scheme has been underway since September last year, and in February it had a reboot by opening up for employers of all sizes, rather than its previous minimum threshold of 30 jobs. 

In the Budget Sunak hailed the scheme’s success for 120,000 young people at risk of long-term unemployment by providing them with fully-subsidised jobs. The funding for the scheme covers 100% of NMW for 25hours a week. Employers in sectors such as retail, arts, manufacturing and construction are taking part in the scheme. 

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