Employers could be funded directly to purchase the apprenticeship training they want as part of proposals announced today that are designed specifically to put businesses in the driving seat.
Business secretary Vince Cable has announced that the Government is consulting on funding reforms proposed by the entrepreneur Doug Richard. These will give employers freedom to choose the training that’s most relevant to the needs of the apprentices and their businesses, and which represents best value.
The Richard Review of Apprenticeships, published in November last year, looked at how apprenticeships in England can meet the needs of the changing economy.
Three options are being presented, but alternative models will also be welcome. The three proposals are:
• Direct Payment Model: businesses register apprentices and report claims for Government funding through a new online system, and Government funding is then paid directly into their bank account
• PAYE Payment Model: businesses register apprentices through a new online system and then recover Government funding through their PAYE return
• Provider Payment Model: Government funding continues to be paid to training providers, but they can only draw it down when they’ve received the employer’s financial contribution towards training
Vince Cable said: “Employers are the best people to judge what training is worth investing in. These reforms will mean just that. It gives them the power to train their staff to make sure their skills are relevant to the company while choosing from the wide range of courses available.”
The coalition Government’s business secretary continued: “These measures are all part of the wider reforms the Government is making to the apprenticeship system. By putting quality ahead of quantity and giving the training that companies actually want, we’re helping to create jobs and support business.”
Making it easier for companies to take on apprentices
As well as consulting on long term measures to reform apprenticeships, the Government is also taking actions in the shorter term to make it easier for companies to take on an apprentice.
Companies with 1,000 employees or fewer can take advantage of a £1,500 Apprenticeship Grant for Employers (AGE) for another year, in turn helping SME-style businesses to take on an additional 35,000 young apprentices.
Latest figures show that almost 30,000 young people have been taken on under the current grant.
Skills minister Matthew Hancock commented: “Small and medium-sized businesses are the lifeblood of our economy and, by extending the £1,500 grant for a further year, we will give them the skills they need to grow and help 35,000 more young people into meaningful employment.”
Hancock went on to state: “Currently there are many examples of outstanding apprenticeships, but we want this to be the case every time so we are taking steps to make sure that they’re more rigorous and as responsive to the needs of employers and individuals.”
In conclusion, the skills minister explained: “By radically reforming the funding system we will allow employers to agree with training providers the content and price of training. This will ensure greater competition both on quality and on price.”
Michael Davis, CEO of the UK Commission for Employment and Skills, has also made a statement on today’s announcement.
“The labour market has seen a long-term decline in the number of entry level jobs,” said Davis, “and, critically, there are too few good jobs for young people. Apprenticeships are a proven way of delivering highly productive, well trained and loyal staff, access to a successful career for young people and strong benefits for the exchequer and the economy as a whole. Yet only 15% of UK employers offer them.”
Davis added: “The Commission’s perspective is that we must return apprenticeships to their founding principle – a contract between the apprentice and the employer, valued and funded as such.”
To help increase take-up among employers even further, the National Apprenticeship Service (NAS) has launched a new film. ‘How to Hire an Apprentice’ features on Apprentice.TV and guides employers through the process of recruiting.
In addition Jason Holt, a small business and training academy owner, has also been appointed as an Apprenticeships Ambassador to encourage smaller businesses to take on an apprentice.