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New voucher scheme aims to 'simplify' apprenticeship funding for employers

A new ‘digital voucher’ scheme is being developed to put employers in control of apprenticeship funding, it was announced today.

The government said its new digital apprenticeship voucher will "simplify things" for employers and give them purchasing power over the government contribution to apprenticeship funding.

Under the voucher scheme, the employer would register their details on a system being developed by the Skills Funding Agency, which would calculate the discounted rate at which employers can purchase training. This could be up to 100 per cent for 16- to 18-year-olds.

The employer would then be able to pass on the voucher code to the provider that is delivering the training for their apprentice, and the provider would reclaim the value of the voucher from the Skills Funding Agency. Under the system, no funding would be directly given to employers.

Stewart Segal, chief executive of the Association of Employment and Learning Providers, said the system reflected the views of employers by giving them a choice of provider.

“We have yet to see the details behind the announcement but we would hope that the government is now talking about a simpler funding support from government that takes into account the various incentives proposed in the previous funding models rather than separate payments for each,” he said. 

“We will be very happy to work with government to make this new funding model work and to avoid some of the barriers to employers that could have been created by mandatory cash contributions and employers setting the funding rates.”

John Cridland, director-general of the CBI, said: “Employers must be in the driving seat when it comes to apprenticeship funding, so we welcome the announcement of the voucher system but await further details.”

The minimum wage for apprentices is also to go up by 20 per cent to £3.30 an hour, it was announced today.

The Low Pay Commission had recommended that the wage for apprentices go up by just 7p an hour, but the government rejected this and decided to increase it by 57p an hour instead.

The rate applies to all apprentices aged 16-18 and those aged 19 or over who are in their first year, while all others are entitled to the national minimum wage for their age.

However, Mr Cridland said said it was “disappointing” the government had rejected the LPC’s recommendation, and said the “politicisation” of the minimum wage was “worrying”.

Mr Segal said any increase to the apprenticeship wage rate should not have an impact on the number of employers providing apprenticeship places, and the programme should be properly funded in the sectors where the minimum wage was an issue.

Related stories

Government sent back to the drawing board on apprenticeship funding reforms – January 2015

Apprenticeships: funding reforms 'won't be a burden', pledges minister – October 2014

Apprenticeships: funding concerns remain despite government statement – August 2014

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