Small and medium-sized businesses will receive a £2,000 incentive payment for every young apprentice they recruit under a new government initiative designed to boost apprenticeship numbers and help tackle youth unemployment.
Announced by the Department for Work and Pensions, the measure is aimed at supporting non-levy-paying employers, typically smaller firms, with the costs associated with taking on and training young apprentices.
The incentive forms part of the Government's wider commitment to create 50,000 additional youth apprenticeships and expand opportunities for young people to enter skilled careers across the UK.
Under the scheme, eligible employers will not need to apply for the payment. Instead, apprentices will be identified when they begin training and the funding will be routed through apprenticeship training providers before being passed on to the employer.
The £2,000 payment will be made in two instalments, with £1,000 paid after an apprentice completes their first 90 days and the remaining £1,000 paid after 12 months, or after 242 days in the case of shorter apprenticeships and foundation apprenticeships.
The Government said the support would help smaller businesses develop the skilled workforce they need while providing more career opportunities for young people in local communities.
Alongside the financial incentive, ministers have also launched an updated apprenticeships.gov.uk website, intended to make it easier for employers and prospective apprentices to access information about funding, eligibility and available opportunities.
The announcement is part of a broader package of measures focused on improving skills provision and reducing youth unemployment. These include a £2.5 billion investment in the Government's Youth Guarantee and Growth and Skills Levy programmes, which together are intended to create almost one million education, training and employment opportunities.
Work and Pensions Secretary Pat McFadden said supporting smaller businesses was essential if more young people were to benefit from apprenticeships.
"To ensure every young person has the chance to earn and learn, we must support small and medium-sized businesses to take on young people. That's why we're giving every small business hiring a young apprentice £2,000, on top of the countless other benefits that young person will bring, and putting all the information a business needs in one place online.
"We promised 50,000 more youth apprenticeships, and we're delivering on that promise, one hire at a time."
Business Secretary Jonathan Reynolds said apprenticeships delivered benefits for both employers and employees.
"The more a business invests in its workers, the more invested the workers are in the success of the business.
"This apprenticeship support is a fantastic opportunity for small businesses to get access to exceptional talent, and in return, gain the fresh energy, ideas and loyalty that come from investing in someone's future.
"By putting the support and guidance they need all in one place, we're making it easier than ever for small businesses to say 'you're hired' to an apprentice."
The Federation of Small Businesses (FSB), which has long campaigned for the return of apprenticeship hiring incentives, welcomed the announcement.
Craig Beaumont, executive director of the FSB, said: "Taking on an apprentice comes with extra costs so financial support can make a real difference for small business owners.
"The new £2,000 incentive for non-levy paying employers will give small firms much-needed extra support to take on and train up more apprentices and help tackle the growing challenge of young people not in education, employment or training."
Beaumont also highlighted that the new incentive can be combined with existing support measures worth up to £6,000, potentially creating a total support package of £8,000 per apprentice.
The apprenticeship initiative is being further supported through an expansion of the Apprenticeship Brokerage pilot programme. Backed by £100 million of funding over two years, the scheme will now be extended to all existing mayoral strategic authorities across England.
The Government said the expansion will double the number of areas able to provide local support for young people seeking apprenticeships and help employers connect with suitable candidates. Ministers believe regional authorities are well placed to identify local skills needs and work with businesses to create apprenticeship opportunities that support economic growth. The Government hopes the measures will encourage thousands more SMEs to invest in training the next generation of skilled workers while strengthening local labour markets and supporting long-term business growth.
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