Osborne’s Budget boost for apprenticeships

September 1, 2015

Darren Evans – 19th March 2014

The government has announced almost £200 million worth of new funding to boost apprenticeships.

In the Budget this afternoon, Chancellor George Osborne said that £170 million would be made available to meet business demand for the Apprenticeship Grant for Employers (AGE) scheme.

Under the AGE, employers who have not had an apprentice in the last year can receive a £1,500 grant for each of up to ten apprentices between the ages of 16 and 24 they take on.

The scheme will be focused entirely on small businesses – those with fewer than 50 employees – from January 2015. Provisional figures show there were 49,300 apprenticeship starts for which a payment was made through AGE between February 2012 and October 2013, with a further 15,800 in the pipeline.

The new cash, which is made up of £85 million in 2014-15 and £85 million in 2015-16 and split across the Department for Business, Innovation and Skills (BIS) and the Department for Education (DfE), will fund more than 100,000 new grants.

Business Secretary Vince Cable said: “AGE has been very successful in encouraging smaller businesses to take on their first apprentices.

“With the appetite for apprenticeships growing, this new £170 million investment and programme expansion will give a boost to smaller businesses and enable us to meet the higher than anticipated demand for the scheme over the next two years.”

There is also an extra £20 million to support degree-level and post-graduate apprenticeships.

Again split over two years, the new money will part-fund the training of degree-level or postgraduate apprentices, with the remainder of the cost met by the employer.

The government says it has supported more than 13,000 degree level apprenticeships since 2010.

The University and College Union (UCU) welcomed the announcements, but said proper funding was required if the policy was to succeed.

The union called for better pay for apprentices, who are paid as little as £2.68 an hour, and said it wanted to see longer apprenticeships with a minimum of three years to ensure apprentices receive a well-rounded education.  Chris Jones, chief executive of the City & Guilds Group, said the apprenticeship system now needs stability.

“Over the past few months there have been extensive changes to apprenticeships, from a focus on employer ownership, to the trailblazer expansion, right through to the end of 24+ loans,” he said.

“The emphasis should now be on protecting funding across the further education sector, as well as educators and employers working together to drive quality.”

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