Mayor boosts apprenticeships drive with £1.5m fund for SMEs

13 June 2013

As part of his continued campaign to boost employment opportunities in the capital the Mayor of London, Boris Johnson, has allocated £1.5m to help London-based small and medium-sized (SME) businesses take on young people as apprentices.

With more than 800,000 SMEs and a combined turnover of £430 billion, the Mayor believes the SME sector is central to the continued strength of the capital’s economy and to ensuring that young Londoners in search of work are helped on to the career ladder.

The fund, approved by the London Enterprise Panel (LEP), means that SMEs will be able to apply for a £3,000 incentive payment through the National Apprenticeship Service (NAS) – nationally the incentive payment available to employers is £1,500. It is estimated that the funding boost could help to create a further 1,000 new places in London. The news comes as the most recent employment statistics show that private sector employment is up by 6.5 per cent in the capital, compared with 3.2 per cent in the rest of the country.

The investment is part of a £111million pot secured by the Mayor from the Government's Growing Places fund to support the work of the LEP. The money is being invested in sectors the LEP has prioritised as vital for London's growth including support for small and medium businesses; infrastructure development; raising skills and employment opportunities; and boosting growth in digital, science, technology and creative industries. So far the Mayor’s campaign with NAS has seen the creation of more than 100,000 apprenticeships in the capital since 2010 and, as outlined in his newly published ‘2020 Vision: Ambitions for London’, he has set an ambitious target of creating 250,000 by the end of 2016.

The Mayor of London, Boris Johnson, said: “Small and medium-sized businesses are the lifeblood of the capital’s economy and central to providing employment opportunities for talented young Londoners. Companies that have already taken on apprentices know the difference they can make to the bottom line and so we want to encourage more firms to get on board. This incentive is aimed specifically at SMEs and I’m urging company bosses from all corners of the capital to check out how it can benefit them and the wider London economy.”

Vic Grimes, Divisional Apprenticeship Director, National Apprenticeship Service, London and the South East said: “Apprenticeships deliver for businesses, young people and the economy which is why we work extremely hard to help employers in the capital to expand their Apprenticeship offering. There has never been a better time to recruit an apprentice and we are delighted to welcome the additional incentive now available to SMEs in London, which will go a long way to achieving the Mayor’s ambition of creating 250,000 more Apprenticeships by 2016.

“I hope more organisations will now be encouraged to consider the benefits offered by Apprenticeships and reap the rewards of a more motivated, skilled and qualified workforce.”

Tim Campbell, the Mayor’s Ambassador for Training and Enterprise, said “The welcome news that the Apprenticeship Grant for Employers has been increased to £3000 for eligible SMEs is exactly what will encourage more firms to take on their first apprentice. Building on the excellent recommendations from Jason Holt’s review last year, this enhanced payment will help us to tap into what is a really crucial segment of London’s economy and help get more young Londoners into work.

“SME owners who have already taken on apprentices have seen the huge value that motivated, productive and loyal young people bring to their small businesses and I’d urge more to step forward and make use of the financial support that’s available to them. Working with the Mayor’s team and the London Enterprise Panel we hope this announcement boosts the numbers of SME employers we can work with to take advantage of the wealth of emerging talent in the capital.”

Sue Terpilowski, London Policy Chairman, Federation of Small Businesses and member of the LEP, said: “The Federation of Small Businesses supports the move to increase the employer incentive for taking on an apprentice to £3,000. Small businesses are keen to take on staff, especially apprentices, however the costs of operating in London act as a deterrent which is why we have long argued for the smallest businesses in the capital to be recompensed for employing staff.”

The announcement of the funding incentive for SMEs comes shortly after the Mayor launched a new concessionary travel scheme for apprentices, which allows anyone in the first year of an apprenticeship to get 30 per cent off adult rate Travelcards and Bus & Tram pass season tickets. The scheme is expected to benefit around 40,000 apprentices living and working in the capital and could save an apprentice up to £660 a year on the cost of an annual travel card.

Notes to editors

About the Apprenticeship Grant for Employers (AGE 16 to 24)

The National Apprenticeship Service is offering businesses with up to 1,000 employees a grant of up to £3,000 to recruit their first apprentice aged 16 to 24. The London AGE 16 to 24 is available for London based SMEs employers recruiting an apprentice aged 16 to 24 with a start date of 10th June 2013 until 31 December 2013 subject to availability (grants will be issues on a first come first served basis). Employers will be required to commit to employing an apprentice for a minimum of 12 months, or the time it takes for the apprentice to complete their programme.

There are currently more than 800,000 small and medium sized businesses in the capital, representing 99.8% of London’s private sector businesses and employing almost 2.3 million people.

About the London Enterprise Panel:

The London Enterprise Panel is the local enterprise partnership for London. It is co-Chaired by Deputy Mayor for Business & Enterprise Kit Malthouse and Harvey McGrath. Its membership is drawn from London’s business community and local authorities. The panel has developed a Jobs and Growth Plan outlining a series of aims and recommendations to grow London's economy and boost private sector investment: www.london.gov.uk/londonenterprisepanel 

To date, the Mayor and the LEP have announced: £25m to create a fund to support small and medium businesses; £2million for Film London (comprising City Hall and Growing Places money) enabling it to capitalise on a new tax relief for TV and animation production; £40million allocated to four major transport infrastructure projects; and £700,000 to support the delivery of an export programme. A total of around £70million has been allocated or is in the pipeline for bids received in the first round of funding. These are now being worked up into detailed proposals with a view to confirm more funding announcements in the coming months.

About the National Apprenticeship Service (NAS)

The National Apprenticeship Service focuses on increasing the number of apprentices in England. It works with employers to help them introduce apprentices into their businesses, help those looking to start their careers find an Apprenticeship opportunity and contribute towards the costs of the training and qualifications within an Apprenticeship.

It engages with a wide range of partners to help design the frameworks for apprentices and implements all Government policies aimed at setting the high standard of quality Apprenticeships. It promotes excellence in Apprenticeships and vocational training with awards, campaigns and skills competitions including National Apprenticeship Week and WorldSkills UK. 

About Apprenticeships

- Tailored to suit employers: Apprenticeships have been developed with business, to suit business. Employers can also choose to add on extra learning and knowledge development to suit their specific business requirements.

- Improving motivation and efficiency: 80% of those who employ apprentices say they make the workplace more productive and 92% of say they lead to a motivated and satisfied workplace.

- Building diversity of skills and perspectives: A diverse workforce brings different skills, experiences and ideas to a business – delivering proven, bottom line benefits for employers.

- Improving social responsibility: Recruiting and championing apprentices represents a real contribution to the local community – and helps foster social mobility. 81% of customers would prefer to use a company that employs apprentices.