SMEs to get £2000 boost when taking on young apprentices

Smaller businesses hiring apprentices aged 24 and under will receive a £2,000 grant for each young person they take on to help cover costs related to their employment.

Backed by the Federation of Small Businesses, the scheme will help non-levy paying employers, which are typically small- and medium-sized enterprises, to cover the costs of taking on a young person as an apprentice, such as uniform, equipment or travel costs.

Rather than small businesses applying for the payment, eligible apprentices will be identified as they start their training and the hiring payment will be sent to the apprenticeship provider to pass onto employers. It will be paid in two instalments: £1,000 after the apprentice completes their first 90 days, and the second £1,000 after the one-year mark, or after 242 days for shorter apprenticeships and foundation apprenticeships. 

Craig Beaumont, Executive Director of the Federation of Small Businesses (FSB), said:

“FSB campaigned for the return of a meaningful apprenticeship hiring incentive and we are pleased to see this come into effect. Taking on an apprentice comes with extra costs so financial support can make a real difference for small business owners.

“The new £2,000 incentive for non-levy paying employers will give small firms much-needed extra support to take on and train up more apprentices and help tackle the growing challenge of young people not in education, employment or training.

“It’s particularly positive that this funding can be stacked with other support worth up to £6,000, so could form a substantive package of up to £8,000 per apprentice. Combined with wider reforms to expand apprentice brokerage services to all the mayoralties, this is a good step towards helping more small firms invest in the next generation of workers.

“We’d encourage small business owners to make the most of this support.”

The initiative is part of the Government’s £2.5 billion Youth Guarantee and Growth and Skills Levy investment, which looks to deliver around one million opportunities for young people, including 50,000 apprenticeships, as part of effort to reduce youth unemployment.