New £1000 support for young care leavers starting an apprenticeship

Care leavers who choose to start an apprenticeship will receive a £1000 bursary to help the transition into the workplace. 

Care leavers will be boosted by a new £1,000 bursary payment if they choose to do an apprenticeship from August 2018, the Government has announced.

The extra financial support will be for those aged 16-24 and help them in the first year of their apprenticeship as learners transition into the workplace for their practical studies.

This change is one of a small number of improvements – including increasing the number of apprenticeship funding bands – which will come into effect from August 2018.

Apprenticeships and Skills Minister Anne Milton said:

We know those leaving care can experience additional barriers to getting an apprenticeship.

Everyone should get a chance to be able to start an apprenticeship and change their life, so I’m really pleased that as we see how we can make the apprenticeship system work better we are able to offer this extra support for those leaving care.

Chief Executive of The Children’s Society Matthew Reed said:

It can be hugely difficult for children leaving care to manage their finances for the first time without the family support enjoyed by other young people and they are more likely than their peers to not be in education, employment and training.

Care leavers have told us how they have struggled to make ends meet and pay the bills after taking up an apprenticeship on low rates of pay when they cannot rely on additional support from parents such as being able to continue living in the family home.

That’s why The Children’s Society called on the Government to offer an additional grant to all care leavers in their first year of an apprenticeship, when pay can be as low as £3.70 an hour, and we are delighted that ministers have listened. We hope this grant will make apprenticeships a more viable option for young people looking to find work after leaving care and help set them on the path to a brighter future.

Stephen Evans, CEO, Learning and Work Institute said,

Our research shows the complexity of funding rules is a barrier to apprentices getting the support they need. The new bursary payment for care leavers, along with reviewing the rules and continuing disadvantage support, is therefore welcome.

But we need an Apprentice Premium and an access fund to more decisively tackle inequalities in accessing apprenticeships. The Government’s conclusion that more price bands will increase negotiation on price doesn’t stack up. We’ve called for fixed prices so that competition is on quality.

The £1,000 bursary will be paid once to each care leaver in the eligible age range, when they start an apprenticeship after 1 August 2018. This comes in addition to the £1,000 we provide to both employers and training providers when they take on 16 to 18 year olds or 19 to 24 year olds who were in care or who have an Education, Health and Care plan.

Summary of policy changes that will take effect from 1 August 2018. 

Funding Band Structure

DfE have reviewed the apprenticeship funding band structure to assess whether the existing 15-band structure supported employers in securing value for money.

DfE expect employers to negotiate prices with training providers, conscious of the fact that the upper band limit represents the maximum that government will contribute towards the apprenticeship and is not a fixed price.

However, DfE have seen limited price negotiation in the market, with many employers telling them that they do not feel they are able to negotiate on price or that they consider the funding band upper limit to be the ‘rate’ set by government.

Following feedback from stakeholders, DfE have decided to introduce more funding bands in order to support negotiation between employers and providers on price.

Therefore, DfE are increasing the number of funding bands to 30.

This funding band structure will take effect for new starts from August 2018 and DfE will allocate newly developed standards into the 30-band structure.

Existing standards and frameworks will be placed in the new structure at the same level as they have been under 15 funding bands.

DfE will keep all prices under review, with changes to frameworks only where there is strong supporting evidence. Apprenticeship standards are subject to regular review by the Institute for Apprenticeships and any future reviews will make recommendations on the appropriate funding level based on the new 30-band structure.

Transitional payments to providers training 16-18 year olds and additional payments in areas of disadvantage on frameworks

The current policy includes transitional measures, whereby providers training a 16-18 year old on a framework receive a further payment from Government equivalent to 20% of the funding band maximum, and providers also receive payments for training individuals from disadvantaged areas on frameworks.

DfE have seen starts on standards grow, which are generally funded at higher rates, but know that many providers are still delivering substantial numbers of frameworks, including to 16-18 year olds. It is important that apprentices are still able to undertake these frameworks until the relevant standards are available.

As such, DfE will be continuing to provide a payment equivalent to 20% of the funding band maximum to providers training 16-18 year olds on frameworks, and additional payments to providers training individuals from disadvantaged areas on frameworks.

Additional payments for apprentices who require learning support

DfE’s research found that some providers do not clearly understand when they can claim additional learning support. Providers might not be claiming for individuals who would benefit from support, and therefore may be reducing their chances of successfully completing the apprenticeship. DfE are therefore updating the funding rules to provide greater clarity on eligibility and the support available.

DfE also understand from research that some apprentices experience challenges with their mental health, which can prevent them from fully participating in their apprenticeship. Understanding of available support is also limited, and DfE will draw greater awareness to the ‘Supporting Apprentices’ mental health service, operated by Remploy on behalf of the Department for Work and Pensions, which provides a range of free advice and support.

Support for care leavers

Care leavers can experience extra barriers when making the transition to the world of work and DfE want apprenticeships to help them overcome those.

These barriers can include particular financial hardship and living independently at a young age.

DfE are introducing a £1,000 bursary payment to support care leavers aged 16-24 starting an apprenticeship. This bursary will help to meet the costs they incur as they transition into work and support them in the first year of their apprenticeship, when wages can be lower for some apprentices. DfE will pay this once to each care leaver in the eligible age range starting an apprenticeship, via their training provider.

The new apprenticeships funding policy was introduced in May 2017, in support of the apprenticeships levy. For more information, read the new Apprenticeships Funding policy paper.