The UK government has announced increased incentives for apprenticeships, traineeships, and other business growth schemes in the 2021 spring budget.
Global economies have taken a huge hit over the last year, so when the UK government’s spring budget was published on 3rd March, the focus was unsurprisingly on economic recovery and boosting employment.
The budget reported that £60 million has been allocated to apprenticeship schemes in 2021-22, and £75 million for 2022-23, with an additional £126 million for traineeships for the 2021/22 academic year. Further initiatives include portable apprenticeships and the Help to Grow scheme for SMEs.
How is the government investing in apprenticeships?
The Plan for Jobs is a UK government initiative to support employers and boost employment. In the spring budget, an increase in apprenticeship incentives was announced to encourage employers to participate in apprenticeship schemes:
- Initially, from August 2020 companies were incentivised with £2,000 for hiring apprentices aged 16 to 24, and £1500 for hiring apprentices aged 25+.
- In March 2021 incentives were increased to £3000 for companies hiring new apprentices – regardless of their age – between 1 April 2021 and 30 September 2021.
- On top of these new incentives, companies are also entitled to £1,000 for employing new apprentices aged 16 to 18 and those under 25 with an Education, Health and Care Plan.
What is a “portable” apprenticeship?
A portable apprenticeship – also described by the Treasury as a ‘flexi-job’ apprenticeship – enables apprentices to work across multiple disciplines with different employers. This facilitates long-term training and varied experience and allows multiple employers to participate in the scheme.
The government will put £7 million toward this initiative from July 2021, with the first portable apprenticeships expected to begin in January 2022. Employers in England – particularly those in the Creative Industries Council – have been invited to share their proposals for participating in the scheme. It is expected that this will be especially beneficial to the creative sector.
What is the difference between an apprenticeship and a traineeship?
The two key differences between traineeships and apprenticeships are level of commitment and pay. While apprenticeships operate under a fixed-term contract at a set minimum wage or higher, traineeships do not have the same pay obligations and can end at any point.
Traineeships are a combined education and work experience programme which typically last between six weeks and six months to get young people between 16-24 years old prepared for work, while apprenticeships can often last between one to four years and mark the start of a career.
In the 2020/21 academic year the government allocated £111 million in a bid to triple traineeship uptake. This investment has been increased to £126 million for the 2021/22 academic year with a view to attract 40,000 new traineeships in England next year. Employers are incentivised at £1,000 per traineeship.
How does the Help to Grow scheme upskill SMEs?
While multiple lockdowns have provided the time for many individuals to build a ‘side-hustle’ or even launch a new business, on the whole SMEs – which make up around 21% of economic turnover at more than £126.6 billion – have been hugely impacted by the pandemic.
There are over six million SMEs operating in the UK, making up more than 99% of all businesses and 33% of employers. The government aims to upskill 20,000 SMEs over the next three years.
The Help to Grow scheme is a 12-week training programme combining business school teaching and business mentoring which will be 90% subsidised by government to support SME growth.
