The Apprentice Incentive Bonus is Here!
The governement has provided some clearer understanding of Apprentice Incentive Bonus and what is happening with apprenticeships. Even better news… the lovely Gary from DA Training and Consultancy has put it in plain English for us! Take it away, Gary!
Current Apprentices
The Apprentice Incentive Bonus is great news but hold your horses! We can’t talk about the Apprentice Incentive Bonus without talking about those apprentices who have unfortunately been made redundant through no fault of their own.
There is support available if they are in the last 6 months of their apprenticeship and unable to find a new employer (if they can find a new employer, great, they can continue their apprenticeship even if it is in an unrelated sector.)
We have had confirmation that where an apprentice has been made redundant but is continuing their apprenticeship study, they can claim Universal Credit (UC) as long as they satisfy all eligibility criteria. So, this should help them in the short term.
The ESFA is looking into developing a support service for these learners where they will be able to register and hopefully be provided support and an apprenticeship vacancy service. More details to follow on this one!
Lastly, for those currently enrolled on a Level 2 Apprenticeship, and were required to pass their Level 1 Functional Skills and attempt their Level 2, this ruling has been relaxed till the end of December 2020. Therefore, the apprentices will only need to pass their level 1 exams, which is some more good news!!!
Recruiting New Apprentices
The Apprentice Incentive Bonus is great news, but before you go recruiting apprentices, we need to look at whether apprenticeships are right for you, especially in the current climate. As we look to be coming through the worst of the pandemic, it is time for businesses to look at how they recover and start moving forwards. One of the best ways is to look at the apprenticeship model and see if it is a good fit for your business. I will be honest, it doesn’t work for everyone and there are some providers who say yes, every business can operate with apprentices, well I can assure you, I have seen plenty that are just not right to have apprentices!!
Again, a decent provider will talk you through the options and give you an unbiased view on whether it will be a good move for your business. Things to consider if you are thinking of an apprentice:
- They need to have a mentor/manager to support and contribute to their apprenticeship (hence, why self-employed people are ineligible).
- They need to spend 20% of their contracted time “Off the Job” learning (this does not have to be 1 day a week and can be front-loaded to the apprenticeship).
- The minimum duration of an apprenticeship contract must be at least 1 year and 1 week long.
- There should be an opportunity for the apprenticeship to develop into a permanent position (sometimes this doesn’t happen, and Covid-19 is a good example of when it can’t work).
- They are not cheap labour!! They must be seen as an investment to your business and not a solution to a reduced wage budget solely based on finances.
Before the Chancellor’s Apprentice Incentive Bonus announcement, there was already a government grant of £1,000 for anyone who took on an apprentice that was 16-18 years old at enrolment (or 19-24 with an EHCP.)
The good news is that there is now additional funding on top of both the Apprentice Incentive Bonus and £1,000 grant! Starting in August 2020 and running till January 2021. For every apprentice an organisation hires aged between 16 and 24, they will receive a £2,000 bonus from the government as part of the Apprentice Incentive Bonus. For those companies that hire new apprentices aged 25 and over the, Apprentice Incentive Bonus will be £1,500. This is on top of the existing incentive!! This is a massive statement of intent to support apprenticeships and we have a responsibility to make sure as many companies receive this as possible! This is available to both levy and non-levy Apprentices.
As you would expect there are some conditions attached to the Apprentice Incentive Bonus and the headline points to note are:
- The employer must not have employed the apprentice within the six months prior to the apprenticeship contract start date.
- There is no limit on the number of incentive payments, and payment will be made directly to employers in two equal instalments, where the apprentice is still in learning at day 90 and day 365.
- The employer will need to claim the incentive payment via an online apprenticeship system from 1 September 2020.
A full breakdown on the funding rules update can be found here.
Non-Levy Employers
There is some extra good news regarding SME’s and micro-businesses that are thinking of supporting an Apprenticeship Programme.
Already in place is the Small Employer Waiver from the Government. This is for employers with fewer than 50 people working for them. They are able to have an apprentice at no cost as long as they are aged 16-18 or those aged 19-24 who have previously been in care or who have a Local Authority Education, Health and Care plan. These employers are not required to contribute the 5% co-investment; instead, the government will pay 100% of the training costs for these individuals up to the funding band maximum.
For those employers that can’t make use of the above scheme, we as a provider have access to many different levy transfer schemes. This is where large employers aren’t able to spend all of their levy pot and they can transfer it to the smaller provider that is able to make use of it, for free!!!
If this wasn’t enough good news, then if we can’t arrange a levy transfer, we can look to utilise the governments’ “reserve your funding” opportunity. This is where we can request direct payment from the government to pay for the training. We will support you as the employer to set up your own apprenticeship account so that this can be managed in a stress-free way.
As you can see, there is so much positivity around apprenticeships at the moment and we should celebrate and make the most out of this opportunity.
Thank you so much to Gary and the team at DA Training and Consultancy and also congratulations on your new venture.
If you would like more advice on the Apprentice Incentive Bonus or apprenticeships then please do get in touch and we can help point you in the right direction.