£2.5bn Plan for Apprenticeship Training by 2020 Unveiled

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£2.5bn Plan for Apprenticeship Training by 2020 Unveiled

The Government has today published proposals for a new funding model for apprenticeships and further details on the apprenticeship levy. The funding will support apprentices of all ages to gain skills and experience and help employers to offer more training and build a skilled workforce.

Under the plans for the levy, the government has proposed that employers that are too small to pay the levy - around 98% of employers in England - will have 90% of the costs of training paid for by the government.

Extra support - worth £2,000 per trainee - will also be available for employers and training providers that take on 16- to 18-year-old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by government if they take on these apprentices.

Apprenticeships and Skills Minister Robert Halfon said:

“Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers to build a highly-skilled future workforce that the UK needs.”

The government is inviting employers and training providers to have their say on the initial funding proposals, to try to ensure final plans fully meet the needs of all those involved in the apprenticeship programme. To respond, complete the survey by 5 September. Final funding proposals will be confirmed in October 2016.

Skill Shortages
Brian Berry, FMB Chief Executive, said:
“Getting skills and apprenticeships policy right is essential to the UK, and particularly so to the construction industry right now. We face serious skills shortages in our industry at the moment. The only long term cure for this is to recruit and train more people, in particular to attract a new generation of talent to take on the skilled jobs the industry creates.

“Small and medium-sized firms do the majority of training in our industry - micro businesses (those employing fewer than ten people) alone train around half of all construction apprentices. It is therefore crucial that new apprenticeship funding arrangements work for these firms and do not impose higher costs on them.”

“The funding arrangements announced today appear to strike a reasonable balance, which takes into account the support that small employers need.

Berry concluded: “One issue on which we have ongoing concerns is the difficulties and complexities which might come with the new digital apprenticeship service. Small firms express nervousness at the more hands-on role they are being asked to play in negotiating with and paying training providers, and there is real danger in the new system being time-consuming and complicated to a degree which puts off small firms from training.

“As such, we strongly welcome the decision not to require small employers to start using the new system until at least 2018. Government and representatives of small employers need to use this time to thoroughly road test the new system and make sure that it fits the needs of the very smallest firms, those we continue to rely on to train the majority of our industry’s workforce.”

The proposals outlined today include plans to:

  • support all employers to offer high-quality apprenticeships: employers which are too small to contribute to the apprenticeship levy would have 90% of the cost of apprenticeship training paid - ensuring employers of all sizes can develop the next generation of skilled workers
  • provide extra funding for young apprentices and care leavers: the government will pay an additional £2,000 to help 16- to 18-year-olds, young care leavers and young people with an education, health and care (EHC) plan - with £1,000 going to employers and an additional £1,000 to training providers.
  • Employers with fewer than 50 employees will not have to pay anything towards the cost of training a 16- to 18-year-old apprentice, young care leaver or young person with an EHC plan
  • offer more flexibility for employers to retrain individuals: employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications - giving them the freedom to make the training decisions that are right for them so they can train any individual to start an apprenticeship, as long as it is significantly different from their previous qualifications
  • support employers taking on more apprentices: levy-paying employers - those with a pay bill of over £3 million that want to spend more on training than is in their digital account - will benefit from government support with 90% of their additional apprenticeship training costs being funded, so they can continue to recruit and retrain highly-skilled employees
  • Employers will have the power to determine what training their apprentices receive and what provider they receive it from. A new register of training providers will be introduced from April 2017.

Petra Wilton, the Chartered Management Institute’s (CMI) Director of Strategy, said:

"Apprenticeships are a proven route for raising business productivity. Leading employers are already adopting the new professional pathways such as the chartered manager degree apprenticeship, and the new generous levels of government co-investment announced today are welcomed by many businesses, especially those smaller organisations outside the scope of the levy.

"I strongly encourage employers to get involved and ensure that this extensive new offer fully meets their needs. As it can provide the much needed injection of confidence and certainty in the skills agenda, which is needed now more than ever."

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