Department for Innovation, Universities and Skills
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Denham and Balls announce increase to minimum apprenticeship earnings

Denham and Balls announce increase to minimum apprenticeship earnings

DEPARTMENT FOR INNOVATION, UNIVERSITIES AND SKILLS News Release (052/2008) issued by COI News Distribution Service. 9 September 2008

The minimum weekly earnings for all apprentices in England will be increased from £80 to £95 a week next year, Skills Secretary, John Denham and Children's Secretary Ed Balls announced today.

The increase follows a review by DIUS and DCSF of apprentice pay carried out this year. The average net earnings of an apprentice each week is £170 but the Government wants to ensure that the earnings of all apprentices are fair and that they should reflect the support given to young people pursuing other qualifications.

The new £95 minimum, to start from August 2009, will benefit an estimated 26,000 (about 10 percent) apprentices mostly those in traditional less well paid sectors such as hair dressing and social care - of whom 90 per cent are women.

In a speech today Mr Denham will tell the Trades Union Congress:

"We have rescued apprenticeships. We have trebled the number of people taking them up since 1997. Over 60% of people now complete their apprenticeships compared to just over 20% a few years ago.

"We will go on to make sure that they are a mainstream option for all young people and for adults in England. Within the next decade 1 in 5 young people will be able to take up an apprenticeship."

Mr Denham will continue:

"Last year we referred the exemption of apprentices from the National Minimum Wage to the Low Pay Commission. Today the average apprentice is paid over £170 a week. Without prejudicing the work of the Low Pay Commission, I am announcing today that in England, minimum apprenticeship pay will rise from £80 to £95 per week during next year.

"It will be young women - apprentices like those in hairdressing and care - who will benefit most."

Ed Balls, Secretary of State for Children, Schools and Families, said:

"Our radical plan to raise the education leaving age to 18 means we will need to create 150,000 more apprenticeships by 2013 for 16 and 17 year olds who want to follow a vocational path into the world of work. That's 50,000 more young people starting apprenticeships every year. And it is only fair that while people are working and training they are paid a decent wage. .

"Over the past decade we have seen the number of apprenticeship places double and we will see those numbers continue to increase year by year - because there is real demand for them. It is vital for the future success of this country that we develop everyone's skills to the full and apprenticeships are key to doing this.

"Through apprenticeships, the new Diploma and established qualifications like A Levels and GCSEs, we are offering choice to young people across the spectrum, to ensure their talents are fulfilled, wherever they lie."

Colin Wildman, Federation of Small Businesses' Education and Skills Chairman, said:

"We are pleased that the government has acceded to our calls for fairer pay for apprenticeships. The FSB believes in apprenticeships and their value to the economy. A recent survey of our members showed over 80% support an increase in the minimum earnings of apprentices. Raising the minimum wage will create better parity between apprentices and full time staff and help increase training completion rates."

Peter Lambert, Deputy Chief Executive, Business in the Community:

"Apprenticeships enable young people to get the practical training they need to help business meet the skills gap, as well develop young people's talents. We welcome the fact that increasing the minimum wage for apprentices is likely to benefit those in less well paid sectors, such as hairdressing and social care. These sectors typically train more women apprentices."

The Government has more than doubled the number of apprentices over the past ten years and wants to see many more young people and adults taking them up and has committed to increase spending to over £1 billion by 2010/11.

In August John Denham announced that he would cut the red tape around apprenticeships to make it easier for employers to take new apprentices on. He announced that unnecessary bureaucracy such as demands to store paperwork for up to six years, multiple inspection visits and monthly reporting requirements will be ditched at the earliest possible opportunity.

Notes to editors

1. John Denham was speaking at the Trades Union Congress at the Brighton Centre on 9 September.

2. To view a copy of the speech please go to http://www.dius.gsi.gov.uk

3. All apprentices aged 16-18, and those aged 19 and over in their first year as an apprentice are exempt from being paid the National Minimum Wage (NMW). In 2005 the Learning and Skills Council introduced a requirement that employers pay apprentices a minimum of at least £80 per week. The Low Pay Commission is currently reviewing the apprenticeship exemption from the NMW and will report early next year.

4. The new minimum weekly apprenticeship wage has been re-calculated to match the package of allowances and benefits that young people might receive were they in full-time education or unwaged training. We estimate that around 10 per cent of apprentices are affected, concentrated largely in the hairdressing and early years sectors.

5. The average weekly wage for apprentices is expressed at net pay. The Apprenticeship pay survey published this year found that the average net pay apprentices received in 2007 was £170. The average net weekly wage for an apprentice in the Construction sector was £174 in 2007. The report can be viewed online at http://www.dius.gov.uk/research/documents/DIUS-RR-08-05.pdf

6. The new minimum weekly wage for all apprentices will be introduced by the Learning and Skills Council (LSC) in 2009. It can not be introduced before as the LSC has completed the negotiation of contracts with employers and training providers for 2008/09.

7. Funding for apprenticeships will increase by almost a quarter between 2007/08 and 2010/11, to over £1 billion. Funding will be available specifically for expanding apprenticeships for those aged 25 or over.

8. Apprenticeship completion rates have reached an all time high of 63% compared to 24% in 2001/02. Over the 10 year period from 2001/02 to the end of the CSR period in 2010/11 more than 900,000 young people and adults will have successfully completed their apprenticeship. Apprenticeship starts have increased from 65,000 in 1996/97 to over 180,000 in 2006/07. They are projected to grow to almost 210,000 by 2010/11.

9. In July the Apprenticeships Bill was published setting out measures to ensure apprenticeships are of a uniform high quality and have the confidence of apprentices and employers. The Bill, which for the first time will establish a statutory basis for the apprenticeships programme, will ensure schools provide advice about apprenticeships so that young people are properly informed about apprenticeships as a career choice.

10. Last year the Government asked the Low Pay Commission to look at the exemption of apprentices from the national minimum wage and they will report back to the government in 2009.

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