Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment his Department has made of the potential impact of linking employer incentive payments to apprenticeship completion and post-qualification retention in shortage occupations within the building services engineering sector.

The government provides a range of financial support to help employers take on apprentices, these payments are made in instalments at set apprenticeship milestones to support retention.

Foundation apprenticeships were introduced in August 2025, to give young people a route into critical sectors. Employers that take on foundation apprentices, including in building service engineering, will receive additional payments of up to £2,000. This is designed to offset the additional costs employers face whilst supporting the recruitment, retention and progression of young people, e.g. increased mentoring and pastoral care.

The payment is made in three instalments, with the first two spread across the foundation apprenticeship, and the final payment made when an apprentice progresses onto their next apprenticeship, supporting sustained employment for young people at the start of their career.

We also know that SMEs employ large numbers of young apprentices and will be critical in reversing the 40% decline in apprenticeship starts by young people that has occurred over the last decade. That is why we are introducing a new incentive of £2,000 for non-levy paying employers (essentially SMEs) that take on 16–24-year-old apprentices as new employees, to contribute to the additional costs associated with employing young people.

On top of this the government already pays £1,000 to both employers and providers for apprentices aged 16-18, and for apprentices aged 19-24 who have an Education Health Care Plan or have been, or are, in local authority care.

Both payments will be made in two equal instalments, the first at day 90 and the second at day 365 after apprenticeship started (or day 242 if apprenticeship under 12 months).