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Government’s apprenticeship incentive payment is failing to create promised opportunities

Toby Perkins MP, Labour’s Shadow Minister for Further Education and Skills
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In the #PlanforJobs announced in July 2020, the Government announced a cash incentive of either £2,000 or £1,500 for employers to take on a new apprentice until the end of March 2020. At the March Budget this was increased to a flat incentive payment of £3,000 and extended until July 2021.

The Government budgeted for 100,000 hires under the scheme: “Includes the indicative cost of 100,000 incentive payments for new apprenticeship hires.”

Just 34,810 apprenticeships had been started under the incentive scheme by 3 March 2021. Apprentice starts have fallen 18.5 per cent in Q2 2020/21 compared to the same period last year.

Toby Perkins MP, Labour’s Shadow Minister for Further Education and Skills, said:

“Young people are being let down by the Government’s irresponsible handling of this crisis which has led to soaring unemployment and the worst economic crisis of any major economy.

“It is clear their apprenticeship incentive is failing, having created just a third of the promised opportunities.

“Ministers have no plan to reverse the fall in apprentice numbers, they should adopt Labour’s plan for a ‘Jobs Promise’ for young people including using a structured wage subsidy to create the apprenticeship opportunities young people need to gain productive skills and long-term employment.”

Labour’s jobs promise would guarantee young people out of education or work for six months a training or job placement

Under Labour’s proposed wage subsidy employers would receive a full wage subsidy for a new apprentices’ first three months, a 50 per cent wage subsidy for six months and 25 per cent subsidy for the final three months. This would mean half of a new young apprentices’ wages would be paid by the Government, saving employers over £3,500 per apprentice.

This wage subsidy would be funded from the over £300 million underspend from the apprenticeships levy and could have created 85,000 jobs for young apprentices age 16 – 24 this year.

Apprenticeships and traineeships: March 2021

Statistics covering apprenticeships and traineeships in England (August 2020 to January 2021, reported to date) and official statistics covering the apprenticeship service.

This publication contains apprenticeship and traineeship statistics for England, reported to date, for the first 2 quarters (August 2020 to January 2021) of the 2020 to 2021 academic year. Specifically:

  • apprenticeships (aged 16 and over)
  • traineeships (aged 16 to 24)
  • official statistics covering the apprenticeship service and ‘find an apprenticeship’
  • official statistics relating to the Skills Toolkit website

Also released are official statistics covering achievement rates for apprenticeships covering the 2019 to 2020 academic year. Previously this data would have been released as part of the standalone national achievement rate tables publication. As confirmed in our guidance, we will not publish any institution-level qualification achievement rates (QARs) in the national achievement rate tables for the 2019 to 2020 academic year in response to coronavirus (COVID-19). We are publishing high-level summaries of QARs for statistical purposes.

Additional analysis, table 2: Table showing the number of planned starts on the apprenticeship incentive scheme by month and level category as at 3 March 2021

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