Employer Ownership Pilot Fund

The Parliamentary Information Office of the Parliamentary Yearbook has been monitoring progress in Government policy relating to apprenticeships for a major feature in the next edition on further and higher education

In February this year, the Prime Minister launched the Employer Ownership pilot prospectus inviting employers to develop bids for the pilot fund. The Employer Ownership pilot fund was announced in November as part of the Growth Review and offers all employers in England direct access to up to £250 million of public investment over the next two years to design and deliver their own training solutions. The pilot is jointly overseen by the Department for Business, Innovation and Skills, the Department for Education and the UK Commission for Employment and Skills.

Funding for 2012-13 is up to £50m, with an additional £200m available in the second year, subject to evidence of high-quality proposals from employers and ongoing evaluation.

Bids need to demonstrate how public investment will leverage private investment, support apprenticeships and show a commitment to raising skills levels in their sector, supply chain or locality. Detailed guidance and application forms for the pilot were issued at the end of February and bidding closed on 26 April 2012.

Small firms (up to 50 employees) can apply for a £1,500 incentive to hire their first 16-24 year-old apprentice. The competitive fund will route public investment directly to employers and will be backed by significant resources from existing skills budgets.

An initial payment will be made two months after the individual has started their apprenticeship; the balance will be paid after the apprenticeship has been completed and the trainee has progressed into sustainable employment

The aim is to support up to 20,000 new apprenticeships in 2012-13.

In the first round the Government received 269 bids from employers looking to take part in the new pilot to design and develop their own vocational training programmes. A good spread of bids was received from across the English regions and from different sectors, with a good number from the small and mid-sized business community.

Skills Minister John Hayes said:

“Skills are central to the UK economy and our long-term competitiveness and we're making excellent progress with the biggest apprenticeship programme in modern history.

“That's why the Government has put building workforce capabilities through training at the heart of our economic strategy.

“But there's always more to do and because we know the skills system must be demand driven, we're determined to put employers in the driving seat. With unprecedented focus and funding we'll match and beat competitor nations who have always valued vocational education.

“This pilot fund will give employers the space and opportunity for greater ownership of the vocational skills agenda encouraging innovation and new thinking as we provide the platform for sustainable growth.”

Testing the impact of greater employer ownership of the vocational training agenda is the key objective of the pilot. The vision of greater employer ownership has been championed by the UK Commission for Employment and Skills (UKCES) – a non-departmental public body that provides strategic leadership on skills and employment issues.

Charlie Mayfield, Chairman of the UK Commission for Employment and Skills and the John Lewis Partnership, said:

“The pilots are all about encouraging innovation and partnership in an area that is critical to the growth and success of our economy. I look forward to seeing what changes we can start to make as a result of these investments.”

Bidders are seeking a total of around £400m of public investment in this first round of the pilot and the winners of the bids will be announced later in the year.

The Parliamentary Information Office of the Parliamentary Year book will continue to report on the progress of the apprenticeships schemes as we go through the months ahead.