Question to the Department for Education:

To ask the Secretary of State for Education, how much funding has been (a) allocated to and (b) spent on incentive payments for hiring a new apprentice since the start of that payment scheme.

Apprenticeships will be more important than ever in helping businesses to recruit the right people and develop the skills they need to recover and grow. To help employers offer new apprenticeships, they are now able to claim £2,000 for every new apprentice they hire under the age of 25, and £1,500 for new apprentices aged 25 and over. These incentive payments were announced as part of the government’s Plan for Jobs in July 2020 and the extension of the scheme (to the end of March 2021) was announced in the November Spending Review. Employers have been able to register to claim the incentive since 1 September 2020.

It is encouraging that employers continue to see the value apprentices can bring to their businesses, as of 8 January 2021 employers had so far claimed incentive payments for 18,670 apprentices. 15,270 of these were for 16–24 year olds and 3,400 were for those aged 25 and over.

Incentive payments are funded from the overall annual apprenticeship budget. In the 2020-21 financial year, funding available for investment in apprenticeships in England is almost £2.5 billion, double what was spent in the 2010-11 financial year.

Incentive payments are paid to employers in 2 equal instalments to maximise apprenticeship retention. Employers receive the first payment of 50% 90 days after the apprenticeship start date and the remaining 50% after 365 days. These payments are dependent on the apprentice remaining in employment and on their apprenticeship. £5 million has been paid to employers in incentive payments for apprentices who started between August and September 2020. This is the first payment of incentive payments in the academic year to date.