Issued by: Department for Work and Pensions

Smaller businesses backing the next generation will receive £2,000 for every new young apprentice they take on, opening more doors for young people into skilled careers across the country.

• Small and medium-sized businesses to receive £2,000 for every young person taken on as an apprentice

• Refreshed apprenticeships.gov.uk website to make it easier than ever for businesses to get help with hiring apprentices.

• Part of government’s wider drive to deliver 50,000 more youth apprenticeships as it continues to create opportunity for young people across the country

Smaller businesses backing the next generation will receive £2,000 for every new young apprentice they take on, opening more doors for young people into skilled careers across the country.

Backed by the Federation of Small Businesses, the move will help non-levy paying employers, which are typically small- and medium-sized enterprises, to cover the costs of taking on a young person as an apprentice, building the talent pipeline they need to thrive and grow.

To make it as simple as possible for smaller businesses, they do not need to apply for the payment, and it will instead be passed onto them via their apprenticeship training provider.

Small and medium sized businesses are vital for driving growth in every postcode, and this payment will help them better support young people in their local area, enabling people to access a wider range of career opportunities that might otherwise have been out of reach.

As part of ongoing efforts to improve the apprenticeship system for apprentices and businesses a new and improved apprenticeships.gov.uk will serve as a one-stop shop for businesses looking for clear, practical guidance on hiring apprentices, from eligibility criteria through to funding and support.

Employers will be able to calculate how much funding support they are eligible for and hear from real businesses on their apprenticeship experiences, while young people can browse a range of opportunities by interest and access a step-by-step journey of how to apply for an apprenticeship.

Together, these measures are part of the government’s drive to fix the youth unemployment crisis and bring back hope.

This is backed by the government’s additional £2.5 billion investment in the Youth Guarantee and the Growth and Skills Levy, which will deliver almost one million opportunities including 50,000 more youth apprenticeships.

Work and Pensions Secretary Pat McFadden said:

"To ensure every young person has the chance to earn and learn, we must support small- and medium-sized businesses to take on young people.

"That’s why we’re giving every small business hiring a young apprentice £2,000 – on top of the countless other benefits that young person will bring - and putting all the information a business needs in one place online.

"We promised 50,000 more youth apprenticeships, and we’re delivering on that promise, one hire at a time."

Business Secretary Jonathan Reynolds said:

"The more a business invests in its workers, the more invested the workers are in the success of the business.

"This apprenticeship support is a fantastic opportunity for small businesses to get access to exceptional talent, and in return, gain the fresh energy, ideas and loyalty that come from investing in someone’s future.

"By putting the support and guidance they need all in one place, we’re making it easier than ever for small businesses to say ‘you’re hired’ to an apprentice."

Craig Beaumont, Executive Director of the Federation of Small Businesses (FSB), said:

"FSB campaigned for the return of a meaningful apprenticeship hiring incentive and we are pleased to see this come into effect. Taking on an apprentice comes with extra costs so financial support can make a real difference for small business owners.

"The new £2,000 incentive for non-levy paying employers will give small firms much-needed extra support to take on and train up more apprentices and help tackle the growing challenge of young people not in education, employment or training.

"It’s particularly positive that this funding can be stacked with other support worth up to £6,000, so could form a substantive package of up to £8,000 per apprentice. Combined with wider reforms to expand apprentice brokerage services to all the mayoralties, this is a good step towards helping more small firms invest in the next generation of workers.

"We’d encourage small business owners to make the most of this support."

Rather than small businesses applying for the payment, eligible apprentices will be identified as they start their training and the hiring payment will be sent to the apprenticeship provider to pass onto employers. It will be paid in two instalments: £1,000 after the apprentice completes their first 90 days, and the second £1,000 after the one-year mark, or after 242 days for shorter apprenticeships and foundation apprenticeships.

The new support comes alongside an expansion of the Apprenticeship Brokerage pilot to all existing Mayors within a Strategic Authority across England. This expansion is recognition that Mayors can play a powerful role in convening employers, know their local skills needs and are best placed create the apprenticeships their communities need.

Backed by £100 million of additional funding across two years, the expansion doubles the number of areas that will be able to support young people into new opportunities and help them to take the first step into a rewarding and sustainable career in the local area.

Additional information

Apprenticeship Hiring Payment:

Eligibility:

• A non-levy paying employer can get £2,000 to support their apprentice in the workplace if, at the start of their apprenticeship training, they are one of the following:

• 16 to 24 years old

• 15 years old (if the apprentice’s 16th birthday is between the last Friday of June and 31 August)

• And providing they started their job with the employer no more than 90 days before beginning their apprenticeship training.

• The employer can spend it on any costs related to their employment, for example their work equipment, travel costs or uniform.

How and when the employer will be paid

• The employer be paid in 2 instalments of £1,000. They do not need to apply to claim these payments. Their training provider will pass them on if they are eligible.

• They will get:

• the first payment of £1,000 - 90 days after the apprenticeship started

• the second payment of £1,000 - one year after the apprenticeship started, or after 242 days for a foundation apprenticeship

• Training providers must pay the employer within 30 working days of receiving the money from the government.

• The employer will only get paid if the apprentice is still employed by them when each payment is due.

For more information, please visit Apprenticeships.gov.uk

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