7 October 2013

Government funding for apprenticeships should continue to be paid to training providers, the NHBF has said, as salons fear that switching to a system where employers are given direct control of the cash, while attractive on paper, would result in a large amounts of onerous extra paperwork.

The recommendation was made in the NHBF’s response to a government consultation carried out over the autumn, and which closed this month, into alternative methods of funding for apprenticeships.

The government has proposed three alternative models:

  • A “direct payment” model where businesses register apprentices and report claims for government funding through a new online system. Government funding is then paid directly into their bank account
  • A “PAYE payment model” where businesses register apprentices through a new online system and then recover government funding through their PAYE return.
  • A “provider payment model” where, much as it is now, government funding is paid to training providers but where they can only draw it down when they have received the employer’s financial contribution towards training.

However, members made it clear that, if the status quo was maintained, they wanted a much clearer and more efficient system, with some members complaining they commonly experienced payment processing delays of up to six months.

While the direct payment options initially look attractive to employers, there were genuine concerns about the amount of red tape involved with claiming funding , something that could in turn put an additional burden on to employers,” said NHBF chief executive Hilary Hall.


The consultation was part of the government’s wider apprenticeship reform agenda, as outlined in its response to last year’s Richard Review published in March.

The government has indicated it intends to outline its future approach and implementation plan during the autumn, but had yet to do so as this e-newsletterwent to press.

Meanwhile, the government has said some 30,000 apprentices have been taken on by businesses of all shades under its Apprenticeship Grant for Employers scheme.

The scheme, which offers grants of up to £1,500 to small businesses for taking on a first apprentice, sparked controversy within the industry when it was launched in November 2011 once it became clear employers that had taken on an apprentice in the previous three years – even if they did not have one currently – would be ineligible, so effectively ruling out most hairdressing salons.

However the government later backtracked on this stipulation, widening it to cover any small business that had not taken on an apprentice in the previous year.