Chancellor expected to reveal sliding scale of employer cash incentives to boost apprenticeships

The chancellor is set to announce a sliding scale of cash incentives for employers to take on both young and adult apprentices in his summer statement today, FE Week understands.

Firms are expected to receive more for taking on under 25s. Rishi Sunak is due to provide the details this afternoon as he unveils his plan to tackle the anticipated largescale unemployment caused by Covid-19.

Under current Education and Skills Funding Agency rules, employers and providers already receive a £1,000 incentive each for taking on an apprentice aged 16 to 18.

Last night, the government trailed plans for a £2 billion “kickstart” scheme, which will pay the wages of hundreds of thousands of people aged 16 to 24 who are claiming universal credit to take six-month work placements.

The Treasury told FE Week it will be paid at the national minimum wage by age group for 25 hours a week, and employers able to top up pay packets.

The kickstart scheme will be open to funding applications from August 2020, and the first jobs are expected to begin in the autumn.

The Treasury said young people are more likely to be furloughed, and with a quarter of a million more people aged under 25 claiming unemployment benefits since March, they are leaving education into an “extremely difficult” jobs market.

The kickstart jobs programme will “give young people the opportunity to build their skills in the workplace, and to gain experience that will improve their chances of going on to find long-term sustainable work”, they added.

Today’s summer statement comes a week after prime minister Boris Johnsson promised to offer an “opportunity guarantee” that will give “every young person the chance of an apprenticeship or an in-work placement” to boost the economy after Covid-19.

Sunak is also expected to announce a £111 million investment to triple the scale of traineeships in 2020-21 as announced on Monday, an extra £32 million for the National Careers Service to provide tailored jobs advice to a quarter of a million more young people, and £17 million of funding from the adult education budget to almost triple the number of “sector-based work academy placements” next year.

Ahead of his speech, which is scheduled to start at around 12.30pm today, the chancellor said: “Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.

“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation. 

“So we’ve got a bold plan to protect, support and create jobs – a Plan for Jobs.”