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News - 24 July 2013

Government sets out radical plans to shake up apprenticeship funding

As part of a new proposals announced on Wednesday, Employers could be funded directly to purchase the apprenticeship training they want, which will put businesses in the driving seat according to Business Secretary, Vince Cable.

The government is consulting on funding reforms proposed by the entrepreneur Doug Richard. These will give employers freedom to choose the training that is most relevant to the needs of the Apprentices and their businesses, and which represents best value.

Three options are being presented, but alternative models will also be welcome. The three proposals are:

  • Direct Payment Model: businesses register apprentices and report claims for government funding through a new online system; Government funding is then paid directly into their bank account
  • PAYE Payment Model: businesses register apprentices through a new online system; they then recover government funding through their PAYE return
  • Provider Payment Model: government funding continues to be paid to training providers, but they can only draw it down when they have received the employer’s financial contribution towards training

Business Secretary Vince Cable said:
“Employers are the best people to judge what training is worth investing in. These reforms will mean just that.”

Lavinia Newman, founder of ABDS comments:
“These proposed reforms would give businesses the power to train their staff to make sure their skills are relevant to the company, while choosing from the wide range of courses available. Small and medium sized businesses are the lifeblood of our economy and by extending the £1,500 grant for a further year we will give them the skills they need to grow and help 35,000 more young people into meaningful employment.”

These measures are all part of the wider reforms the government is making to the apprenticeship system. By putting quality ahead of quantity and giving the training that companies actually want, we are helping to create jobs and support business.

Companies with 1,000 employees or fewer can take advantage of a £1,500 Apprenticeship Grant for Employers (AGE) for another year, helping small and medium sized business to take on an additional 35,000 young apprentices.

To increase take up among employers further the National Apprenticeship Service (NAS) will launch a new film ‘How to Hire an Apprentice’, on apprentice.tv today to guide employers through the process of recruiting.

If you need any help and advice for your business on the implications of central and local Government Funding initiatives and the construction industry, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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