Grants for employers that recruit apprentices - too much of a good thing?

With the number of unemployed young people aged 16-24 close to a million, it is not surprising that the Government is looking at ways to encourage employers to recruit the so-called “NEETs” (young people not in employment, education or training). In some parts of the country multiple grants available to employers have sprung up, particularly where the new recruit is an apprentice.

Jonathan Bourne, managing director of Damar Training, an apprenticeship provider based in Manchester, unpicks what’s currently available in his area and what prospective employers need to consider when navigating the world of employer grants and apprenticeship funding.

“In Greater Manchester we currently have two main grants available for employers. The first is the national “AGE” grant, run by the National Apprenticeship Service. This is £1,500 for employers with fewer than 250 staff who are recruiting apprentices aged 16-24 for the first time or have not had apprentices in the past three years. Only the first three apprentices attract the grant, so the maximum is £4,500 per employer.

The second grant is available to all employers who recruit a NEET 16-24 year old from Greater Manchester as an apprentice. Here, the amount is £750 and all employers are eligible. There is no fixed cap on the number of apprentices an employer can recruit.

In addition there are a number of grants that use local council or European Social Fund money and amount to anything from £1,000 to £2,500 per head. Eligibility varies in each case and numbers can be quite limited.

And finally there is the Work Programme’s “Youth Contract” which promises up to £2,275 to employers that take on a young person as an apprentice.”

You will have realised by now that the “offer” to employers, although well-meaning, is not exactly clear. Needless to say some of the grants mentioned above only have limited numbers of places available and some but not all can be claimed in conjunction with others. They are usually paid in stages provided the apprentice is still in employment.

No matter how confusing though, should employers turn down “free” money, particularly if they are doing the right thing and supporting young people? So what are they to do? Jonathan Bourne again:

“In the current climate using grant funding to support additional employment and training has to be beneficial for businesses. However, find a good apprenticeship provider. If they promise that you will be able get lots of different grants be cautious – funding always depends on the candidate you choose and a successful apprentice will, over time, deliver many times the value of the grant.”

“Second, bear in mind that, sadly, there is no such thing as free money. A successful apprenticeship programme requires input and support from the employer and there is a requirement that the apprentice receives training during working hours as well as carrying out their job. Over time, apprenticeship programmes deliver a great return on investment – but some investment is always required.”

“Also, many employers are unaware that, for apprentices aged 19-24, Government funding for training drops by 50% with the result that training providers increasingly need to charge an additional fee for their support, particularly if they are also helping with the recruitment process. To get high quality support from your training provider it is therefore likely that some of the grant funding will need to be reinvested in training.”

“At Damar we have developed a funding model called Accelerate© where we charge a small weekly fee over the first 10 months of the apprentice’s employment (there is no cost for apprentices aged under 19 on enrolment). Because the apprentice’s salary usually reflects some of the investment being made, the net cash cost of Accelerate© is modest. The model also means that employers can think about employing older people as apprentices, or even graduates who are currently not eligible for apprenticeship funding support.The availability of grant funding in many cases makes a model like Accelerate© even more attractive.”

“Finally, be patient. Although the training provider will do most of the work there is quite a bit of paperwork and the administration and payment process can take time.”

For more information on recruiting apprentices and whether or not you might be able to secure a grant, please call Jonathan Bourne at Damar Training on 0161 480 8171 or email jonathan@damartraining.com.

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