Last reviewed 26 May 2021
Apprenticeships continue to be a significant option for employers to locate, employ and train promising members of staff in their industry, and the Government remains committed to encouraging their continued use. With this in mind, Ben McCarthy, lead researcher and employment law writer at Croner-i, explores this in more detail below.
What are apprenticeships?
Apprenticeships are a method of training individuals, usually within a skilled profession, while they undertake work at the same time. Although they are often perceived as a way into employment for younger people, apprenticeships are open to all who are aged over 16. The Government encourages employers to use apprentices as a method of creating a skilled workforce.
In Scotland, apprenticeships are run under a contract of apprenticeship, which is similar to a contract of employment, including the rights afforded by one, but is specialised for an apprentice. It will state how long the apprenticeship is expected to last and the training that will be provided. In England and Wales, apprenticeships are run under an apprentice agreement.
There are two types of apprenticeship agreement (old style and new style) due to the phasing out of apprenticeship “frameworks” and the introduction of apprenticeship “standards”, which structure the apprenticeship slightly differently in relation to the training that needs to be offered. The old style is still used in Wales and in some places in England where a standard has not yet been created to replace the framework, however frameworks are no longer available for new starters in England from 31 July 2020.
Apprentices who are working towards both apprenticeship frameworks or apprenticeship standards, or under a contract of apprenticeship in Scotland, must receive off-the-job training. The duration of off-the-job training must be a minimum of 20% of the duration of the apprenticeship. This training can be provided at their place of work and does not need to be done off-site.
The apprenticeship levy
The levy has been set up by the Government to encourage more companies to take on apprentices. Organisations with an annual payroll bill of at least £3 million pay 0.5% of their payroll cost to HMRC per month, who place these funds into a digital account. These companies can then apply for access to their digital account and can start using that account to pay for apprenticeships. Funds in this account expire and are paid to the Government if not used within two years of being paid into the account.
New incentive payments
As part of plans to encourage the creation of new opportunities for young people as we head out of the pandemic, the Government is providing incentive payments to employers who take on new members of staff.
For new apprentices aged 16 to 24, taken on between 1 August 2020 and 31 March 2021, the Government will provide the employer £2000. For those aged 25 and over, this is £1500. However, for all new apprentices taken on between 1 April and 30 September 2021, the Government will provide the employer £3000. The incentive is paid in two instalments — eligibility for the first comes if the apprentice remains employed for 90 days, eligibility for the second if they remain employed for 365 days.
Looking to the future — “flexi apprenticeships”
The Department for Education (DfE) has launched a consultation seeking views on a new operating framework for flexi-job apprenticeship schemes as a means to increase the use of apprenticeships in certain sectors and professions. The consultation document and accompanying survey are open for comments until 1 June 2021.
The aim is to develop portable apprenticeships, “putting apprentices in the driving seat” and enabling them to move between employers in industries where short-term contracts are the norm during their apprenticeship. The Government sees flexi-job apprenticeships as a means to overcome the barriers that have hindered the use of apprenticeships in certain sectors and professions.
However, prior to launching a £7 million fund in July 2021, it wants to explore the different ways such models could operate. It also wants to seek views on how flexi-job apprenticeship schemes can achieve its ambition for long-term financial sustainability, and identify the improvements needed to the previous Apprenticeship Training Agency model.
There is no doubt that apprenticeships remain a key method of training up people who are entering a sector for the first time and remain popular. Going forward, it remains to be seen if they will continue to increase in popularity, especially with the incentives and flexibility that is planned.