Budget 2021: £126m to triple traineeships

Chancellor doubles incentives for employers to hire apprentices and commits £126m to triple the number of traineeships

Kate Parker

Budget 2021: Rishi Sunak announces extra funding for FE

Chancellor Rishi Sunak has confirmed extra investment for further education in the Spring Budget today.

Traineeships are set to get a £126 million boost to fund 40,000 more places, and employer incentives for apprenticeships will rise to £3,000, regardless of the age of the apprentice. 

Watch: The Repair Shop's Jay Blades praises teachers

Background: Chancellor to announce £2bn job scheme for young people

Rishi Sunak's Budget: What will it mean for FE?

Speaking in the House of Commons, Mr Sunak said: “The education secretary and the work and pensions secretary are taking action to give people the skills they need to get jobs or get better jobs. The Restart programme is supporting over a million long-term unemployed people, the number of work coaches doubled, the Kickstart scheme funding high-quality jobs for over a quarter of a million young people, the prime minister's Lifetime Skills Guarantee, giving every adult the opportunity for a fully funded level 3 qualification.

Budget 2021: Funding boost for traineeships

“And we want businesses to hire new apprentices, so we're paying them more to do it. Today, I am doubling the incentive payments we give businesses to £3,000. That's for all new apprentice hires of any age, alongside investing £126 million of new money to triple the number of traineeships. We're taking what works to get people into jobs and making it better.”

The documents published by the Treasury after the chancellor's speech also confirmed a new "flexi-job" apprenticeship, which allows apprentices to work with a range of employers in the same sector. From July, employers will be able to bid for cash from a £7 million fund to create agencies to offer the apprenticeships. 

The 'Help to Grow' scheme

Mr Sunak also announced a new ‘Help to Grow’ skills and training programme for businesses. 

He said: “Today, the business secretary and I are going further with a new set of UK wide schemes, ‘Help to Grow’, which will first help to grow management, will help tens of thousands of small and medium-sized businesses to get world-class management training, dozens of business schools across the UK will offer a new executive development programme with mentoring and peer learning, and government will contribute 90 per cent of the cost of real commitment to learn more, make more and earn more. 

"With the pandemic many businesses have moved online. This has been a challenge, but we want to turn it into an opportunity. We're going to help small businesses develop digital skills by giving them free expert training, and a 50 per cent discount on new productivity-enhancing software worth up to £5,000 each. Both programmes will commence by the autumn and I urge interested businesses to register today on gov.uk/helptogrow – a real commitment to help over 100,000 businesses become more innovative, more competitive and more profitable.”

AoC: Jobs and skills initiatives 'need to be joined up'

Chief executive of the Association of Colleges David Hughes said the Budget was "always going to be a tightrope, getting the balance right between restoring the public finances and supporting people and businesses through tough and uncertain times and between the short-term priorities and the longer term".

"The extension of financial measures announced today supports the cautious approach to easing the lockdown announced last month. I’m pleased to see further investment in the apprenticeship and traineeship incentives, underpinning the chancellor’s commitment to investing in skills and education for the long term.

"It is crucial that unemployed young people and adults can gain new skills which will help them secure and retain good work. Young people leaving education this year will have missed out on their education during the last year and they will face tough times in the labour market. I look forward to seeing further investment in education recovery in the coming weeks. That will be essential to build back fairer as well as better." 

"The recent Skills for Jobs White Paper could be a game-changer for post-18 education and skills and a catalyst for so many of the ambitions this government has to get people into secure jobs that meet the needs of a much-changed labour market. To achieve this, it is crucial that measures like Kickstart, bootcamps, traineeships and college programmes are aligned and funding simplified.

"The programmes currently do not work well together, are confusing to employers and will not work effectively for many unemployed people. The key thing now is to join up jobs and skills initiatives to allow as many people as possible to benefit from them quickly.”

AELP: 'Channel apprenticeship support towards 16- to 24-year-olds'

Association of Employment and Learning Providers chief executive Jane Hickie said: “The boost for traineeships so soon after last July’s investment is exactly the type of support that young people need to secure a job opportunity as we emerge from lockdown. 

“With the continued shelter offered by the furlough scheme, employers and training providers can work closely together to take full advantage of the incentives. Furlough also keeps thousands of existing apprentices in jobs who otherwise might have been at risk of redundancy.

“The extension of the apprenticeship financial incentives until the end of September could be a game-changer and the increase in the incentives should prove to be particularly attractive to smaller businesses who have traditionally offered apprenticeship opportunities to young people. The incentives now subsidise over half the cost of employing an apprentice at entry level, which is what AELP has been calling for since the start of the first lockdown. 

“However, there is a case for channelling increased apprenticeship support towards 16- to 24-year-olds only, because that is where the support is really needed and where the stimulus is required.”

UCU: A 'missed opportunity' to invest in rebuilding education

UCU general secretary Jo Grady said: "Today's statement rightly recognises the importance of education and skills to our recovery from the pandemic. However, this Budget is a missed opportunity to invest in rebuilding the education sector to meet the country's skill needs after years of funding cuts, jobs losses and pay cuts. We need investment now in the education workforce to ensure the sector can recruit and retain the staff it needs to deliver on the government's skills ambitions. 

"Student and staff mental health has been a serious issue in education for many years, but the pandemic has compounded the issue and more funding aimed at mental health services across post-16 education is urgently needed to address this crisis.  

"Now is the time for the government to step up, fund the system properly, abolish fees and ensure that education is available and accessible to all. If the government is serious about ensuring equality of opportunity, it must ensure stable funding for the sector so institutions impacted by the pandemic do not rush to make damaging cuts to courses and jobs which would undermine future capacity. 

"We also need massively increased investment in adult and community learning, accompanied by a coordinated strategy to ensure that all adults – whether in workplaces or prison cells, care homes or colleges – can access the learning that is right for them. Increased funding and flexibility for apprenticeships is welcome but it removes the extra £500 incentive to employ younger people. Funding for apprenticeships should also be prioritised towards frontline delivery if we are to ensure they are an attractive option for young people. 

"Education staff have gone above and beyond during the pandemic to support their students and adapt to rapidly changing circumstances – decent pay and secure employment is the least they deserve. We need more investment in public services and fair pay for staff to ensure that we have the skills to get the country moving again. If this pandemic has taught us anything, it's that public services and key workers are the people who hold our country together. They must not pay for this government's mistakes." 

WorldSkills UK: 'A significant opportunity for the skills sector'

Dr Neil Bentley-Gockmann, chief executive of WorldSkills UK, said: “The chancellor has set out an ambitious vision for rebuilding our economy which represents a significant opportunity for the skills sector.

"Continued increased investment in traineeships and apprenticeships is very welcome and if the recent Skills for Jobs White Paper has given us the framework for delivering the high-quality skills that employers need to power economic growth, the Budget provides a challenging target to aim for. With a new infrastructure bank to encourage investment, plans for port developments for more offshore wind, freeport enterprise zones and city deals to encourage local economic development and job creation, it is clear that higher-quality skills will be needed in all parts of the UK to turn these plans into reality.

“This creates an exciting opportunity for WorldSkills UK and our partners to play a dynamic role in helping to develop a future economy which is global and outward-looking, using our international expertise to bring world-class skills back to the UK in key growth sectors such as advanced manufacturing, clean technology and digital, helping to attract overseas investment to all parts of the UK, better matching up skills demand from employers with local skills supply and providing young people with fantastic training and career opportunities. 

 “I look forward to working with all WorldSkills UK’s partners in governments, businesses and education to champion the role that high-quality skills can play in delivering the chancellor's blueprint for our future economy.”

City and Guilds Group: Budget 'is too shortsighted'

Kirstie Donnelly, chief executive at City and Guilds Group, said: “In the chancellor’s own words, this Budget was unlike any other, a defining moment for the UK’s exit strategy from the crippling impact of Covid-19 and a golden opportunity to set us on a path to recovery. However, the announcement we have seen today appears to be far too shortsighted in its focus. Whilst we welcome a rise in the national living wage, more incentives and some increased flexibility for businesses to take on apprentices and traineeships, what we’re not seeing, and what is needed now more than ever, is a comprehensive long-term strategy that connects all the dots of employment, welfare, skills and education, to connect people to jobs, for longer-term growth and productivity.

 “The stakes are high if we don’t get this right as the lives of millions will be affected for decades to come. Covid-19 is casting a long shadow over the futures of young people in particular, with many unable to secure apprenticeships or find jobs, and still more are spending tens of thousands on degrees with uncertain prospects. We would like to see more support for ‘would-be apprentices’ and hard-hit businesses by extending greater flexibility in the use of the levy to pay wages and allowing employers an extra year to spend their levy funds. This should begin to stimulate growth in apprenticeship numbers after the slump in starts we saw last year.

“And we must remember that the pandemic has also delivered a devastating blow to many people who are mid- to late-career. They seem to have been largely forgotten by this Budget. Whilst furlough may have been extended again, we need funding to be made available right now to help unemployed and furloughed people retrain and reskill so they can transition from one job to another and quickly get back into meaningful work. Otherwise, once furlough ends we may be leaving millions with no route back to the labour market.”

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Kate Parker

Kate Parker is a FE reporter.

Find me on Twitter @KateeParker

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