Firms to gain £2,000 for every new apprentice

EMPLOYERS will be given £2,000 for every new apprentice they hire in a “brand-new bonus” for employers.

Rishi Sunak yesterday unveiled new support to boost jobs for young people, as he warned of the particular impact of the coronavirus crisis on school leavers.

The Chancellor told the Commons: “Over 700,000 people are leaving education this year and many more are just starting out in their careers. Coronavirus has hit them hard.

“We know apprenticeships work. Ninety-one per cent stay in work or go on to further training.

“For the next six months we are going to pay employers to create new apprenticeships.”

From August to January, any firm that hires a new young apprentice aged 16 to 24 will receive £2,000, while those that hire new apprentices aged 25 and over will be paid £1,500.

The payments will be in addition to the existing £1,000 incentive the Government already provides for new 16 to 18-year-old apprentices. The announcement means employers could receive up to £3,000 for hiring schoolleavers over the six month scheme.

The Chancellor also confirmed the Government would provide an additional £111million this year for traineeships in England. For the first time, firms will receive a direct government grant of £1,000 for taking on trainees aged 16 to 24.

The IPPR think tank forecast unemployment for under-25s could double to just over one million by the end of the year. The Treasury has admitted young people are more likely to have been on the job retention scheme, with three in 10 of those aged 18 to 24 furloughed.

Robert Halfon MP, the Tory chairman of the education select committee, said he was “over the moon” with the announcement, but urged the Chancellor to consider raising the public sector target for the proportion of their staff employed as apprentices.

He suggested that raising the target from 2.3 per cent to 5 per cent would create 4,000 new places and also urged him to consider changing the procurement rules so that big companies bidding for public sector contracts must have an apprenticeship target. Mr Sunak said Mr Halfon had made “two very interesting suggestions” and pledged to discuss them with him further.

Matthew Lesh, head of research at the Adam Smith Institute think tank, welcomed the initiatives to help young people. He said: “The Government is rightly focusing on getting young people into real jobs, rather than establishing expensive make-work schemes.”