Mayor's boost to apprenticeships drive with £14m fund for businesses

29 December 2014

• Apprenticeship Grant for Employers to double from £1500 to £3000
• Businesses can apply from 1st January 2015
 
The Mayor of London, Boris Johnson has announced a £14m fund for small and medium sized-businesses to offer an extra incentive to take on an apprentice in 2015. From the New Year this will mean the Apprenticeship Grant for Employers will double, helping the Mayor’s continued drive to boost apprentice numbers in London.
 
Starting on 1 January 2015 London companies will be able to take advantage of the enhanced Apprentice Grant for Employers (AGE) which will rise from the current limit of £1500 to £3000. The funding pot for small and medium-sized businesses, which was secured by the London Enterprise Panel through its Growth Deal with Government, will allow employers to apply for £3,000 per apprentice they employ. The announcement follows a trial project funded by the London Enterprise Panel last year that saw overwhelming demand for the increased grant in London. It is estimated that the funding boost could help to create thousands of new apprenticeship places in London. The news comes as the most recent employment statistics show that, in the year to September 2014, private sector employment was up by 5.4 per cent  in the capital, compared with 3.6 per cent in the UK as a whole.
 
In London there are more than 900,000 private sector small and medium-sized businesses with a combined turnover of over £460 billion. The Mayor believes that these companies are 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 investment forms part of a wider package of funding provided by the Mayor and the London Enterprise Panel to help further increase the number of apprentices in the capital.
 
The Mayor of London, Boris Johnson, said: “More than 20,000 workplaces in the capital are already benefiting from having apprentices in their workforce. A large proportion of these are small and medium-sized businesses but we want to help even more of these companies take on even more apprentices. I urge company bosses from all corners of the capital to take up this cash incentive and help young Londoners in 2015 get a foot on the ladder to success.”
 
The decision to increase the funding from £1,500 follows a three month trial period offering the enhanced £3,000 grant. During the trial the number of AGE-supported apprentices hired in London increased by 25 per cent, from 1,765 to 2,222. Unprecedented high demand for funding saw it fully allocated within three months.
 
Skills Minister Nick Boles said: “It’s excellent news that the Greater London Authority is providing extra support for small businesses in London to take on apprentices. Apprentices offer businesses of all sizes the chance to increase their talent pool and get the skills they need grow. Over 100,000 apprenticeships across the country have already been supported through the Apprenticeship Grant for Employers, and it’s good to see that the GLA are building on this successful model to grow apprenticeships further in the capital’s thriving small businesses.”
 
Steve Warwick, London Regional Chair, Federation of Small Businesses, said: “The Federation of Small Businesses are delighted that the Mayor has committed to working with the London Local Enterprise Panel to reintroduce the uplift of the Grant [for taking on an apprentice] from £1,500 to £3,000 for SME’s.  FSB research shows that London is one of the costliest capital cities to do business in, particularly in terms of high employment costs. We have long argued that the Grant for London businesses should be higher than other parts of the country and this is welcome.  It is important that the funding goes to businesses that need the incentive the most and not larger businesses that would have invested in apprentices anyway.”
 
In his last election manifesto the Mayor committed to increasing the number of apprenticeship opportunities in London as part of his Apprenticeships Campaign. As well as agreeing with government to double the Apprenticeship Grant for Employers, the Mayor has developed an Employer-Led Apprenticeship Programme to help connect businesses and providers to generate as many apprenticeship starts in London as possible. He has negotiated a boost in Higher Apprenticeship Funding for London over the next two years and supports the London Work-Based Learning Alliance’s Apprenticeship Information Ambassador Network to encourage apprenticeships in schools. So far the Mayor’s campaign with the National Apprenticeship Service has seen the creation of more than 170,000 apprenticeships in the capital since 2010.
 
To apply and for support and guidance, London based businesses are advised to go to http://www.apprenticeships.org.uk/

 

Notes to editors

1. About the Apprenticeship Grant for Employers (AGE 16 to 24): The National Apprenticeship Service is offering businesses with up to 249 employees a grant of up to £3,000 to recruit an 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 1st January 2015 until 30th June 2015 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. The Apprenticeship Grant for Employers is comprised of £7m from the Greater London Authority European Social Fund and £7m matched funding from the Skills Funding Agency. The fund, approved by the London Enterprise Panel, means that small and medium-sized businesses will be able to apply for a £3,000 incentive payment through the National Apprenticeship Service – nationally the incentive payment available to employers is £1,500.
2. Private sector employment estimates come from the ONS Public Sector Employment series and include the effects of major reclassifications  that have occurred over the last few years.  Business Population estimates for 2014 from the Department for Business, Innovation and Skills suggest there were more than 900,000 small and medium sized private sector businesses in the capital at the start of 2014, representing 99.9% of London’s private sector businesses and employing over 2.5 million people. These statistics include an estimate of unregistered businesses.
3. The number of workplaces employing apprentices by region is taken from the FE Data Library. The proportion of workplaces employing apprentices is taken from the London Business Survey (GLA Economics). Further information can be found here: https://www.london.gov.uk/priorities/business-economy/publications/gla-economics/london-business-survey-2014
4. About the London Enterprise Panel: The London Enterprise Panel is the local enterprise partnership for London. It is chaired Mayor of London Boris Johnson and 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: lep.london
5. About the Growth Deal: The Growth Deal secured by the London Enterprise Panel sees £236m of Government funding being allocated to the Panel to be used to help create thousands of new jobs in the capital. Other key features of the Deal include a £55m programme of investment in new infrastructure for further education colleges and other skills providers in the capital (with a further £65m also provisionally agreed), up to £5m of funding for a programme to help raise digital skills among young people in London, £70m of funding to be used in partnership with London’s boroughs on projects that will support the London Enterprise Panel’s Jobs and Growth Plan and up to £10m of European Social Funding for a project in central London that will aim to move those furthest from work into the labour market.
6. 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.
7. 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.

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