The government has announced a new bursary scheme designed to support families on benefits whose children begin apprenticeships. Under current welfare rules, households lose between £17 and £330 weekly when young people start apprenticeships, creating a disincentive for employment. The new payments, estimated to benefit several thousand households, will provide up to £4,500 per year to offset these benefit reductions.
The initiative addresses findings from a Social Security Advisory Committee report that highlighted negative effects within the benefits system on young people’s employment decisions. The committee documented cases where single parents with disabled children could lose over £340 per week in benefits if their child started an apprenticeship, an amount exceeding typical apprenticeship wages of £258 weekly. Officials have warned that the current system hampers efforts to reduce the number of young people not in education, employment, or training, known as Neet. Current figures show more than a million people aged 16 to 24 fall into this category, with projections suggesting the number could rise further without intervention.
The bursary scheme will be funded through a £30 million allocation derived from the growth and skills levy, a tax applied to employers with annual wage bills exceeding £3 million. The government characterizes the measure as part of a broader apprenticeship support package that includes training funding for those under 25 and enhanced employer incentives. Work and Pensions Secretary Pat McFadden stated the initiative aims to eliminate financial barriers preventing young people from pursuing apprenticeships.
Opposition figures have criticized the funding approach. Shadow Work and Pensions Secretary Helen Whately acknowledged support for apprenticeships but questioned whether the bursary represents new spending or a reallocation of existing commitments, describing the plan as “uncosted.” Prime Minister Burnham has positioned the apprenticeship initiative within a broader educational strategy aimed at balancing academic and technical skill development while reducing Neet numbers, which he stated are currently trending upward.
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