Taking on an Apprentice: Funding, Training Providers & Employer Responsibilities

Quick Answer: Employers with a payroll below £3 million pay only 5% of the apprenticeship training cost — the government funds the remaining 95% through the Apprenticeship Levy system. You must pay the apprentice at least the National Minimum Wage for apprentices (£7.55/hour for under-19s or first-year apprentices in 2025/26) and release them for off-the-job training for at least 20% of their contracted hours.

Summary

Apprenticeships offer small building and trade businesses a cost-effective route to building a skilled workforce. The government's co-investment model means that for most small employers, the training cost is minimal — a fraction of what it would cost to put an existing employee through a day-release course. The real cost is time: supervising and mentoring an apprentice, managing their off-the-job training requirements, and dealing with the additional administration.

Understanding the funding system, the responsibilities that come with it, and how to work with training providers effectively is the difference between a successful apprenticeship that benefits both employer and apprentice, and one that becomes a compliance headache. Many tradespeople who take on apprentices for the first time are surprised by how formal the process has become — ESFA (Education and Skills Funding Agency) audits are real, and poor record-keeping can result in training funding being clawed back.

The payoff for getting it right is significant: a well-trained apprentice can be productive within 12–18 months, and a tradesperson you've trained from scratch in your own working methods is often a better long-term employee than someone who learned their trade elsewhere.

Key Facts

• Levy threshold — companies with payroll over £3m pay into the Apprenticeship Levy (0.5% of payroll); below £3m, co-investment applies
• Co-investment for small employers — employer pays 5% of training costs; government pays 95%
• Funding cap — each apprenticeship standard has a maximum funding band (e.g. Plumbing & Domestic Heating Technician: £15,000; Electrician: £18,000)
• Employer contribution example — 5% of £15,000 cap = £750 over the apprenticeship duration
• National Minimum Wage for apprentices (2025/26) — £7.55/hour for apprentices under 19, or over 19 in their first year
• Apprentice hours — after their first year, apprentices over 19 must be paid the relevant NMW for their age
• Off-the-job training — minimum 20% of contracted hours must be formal off-the-job training (day release, block release, online learning)
• Duration — most Level 3 trade apprenticeships are 3–4 years
• EPA (End-Point Assessment) — independent assessment at end of apprenticeship; apprentice must pass to receive the qualification
• EPAO — End-Point Assessment Organisation; separate from the training provider in most cases
• Training provider — a college, independent training provider (ITP), or group training association (GTA) delivers the academic and practical training
• Employer obligations — provide a safe learning environment, assign a mentor, allow time for off-the-job training, not exploit the apprentice as cheap labour
• Apprenticeship agreement — legal document between employer, apprentice, and training provider; must be in place before training starts
• Completion and certification — on successful completion, apprentice receives apprenticeship certificate and typically a Level 3 NVQ or equivalent

Quick Reference Table

All funding caps should be verified at the current ESFA funding cap list

Detailed Guidance

Finding an Apprentice

ESFA Find an Apprenticeship service: Post your apprenticeship vacancy free of charge at https://www.gov.uk/recruit-apprentice. This is the primary channel for school leavers and young people looking for apprenticeships.

Local schools and colleges: Direct contact with schools in your area often yields motivated applicants. Speak to careers advisors. Colleges that offer construction and building services programmes can recommend suitable applicants.

Word of mouth: A significant proportion of apprentices in the trades are recruited through family connections. There is nothing wrong with this, provided the apprentice is genuinely suited to the trade.

Training providers: Once you have identified a training provider to deliver the academic component, they can often help with recruitment by promoting the vacancy to their prospective student cohort.

Choosing a Training Provider

The training provider delivers the off-the-job training component — typically one day per week or in block release periods. They also manage much of the ESFA administration and compliance monitoring.

Finding providers: Search the ESFA Register of Apprenticeship Training Providers at https://findapprenticeshiptraining.apprenticeships.education.gov.uk. Filter by trade and location. Only registered providers can access government funding.

What to look for:

• Ofsted rating (Good or Outstanding preferred)
• Local proximity (reduces travel burden on apprentice)
• Track record with your specific trade
• Industry-current facilities and equipment
• Clear communication with employers about progress

Avoiding poor providers: Ask to visit the training facilities before committing. Ask what percentage of their apprentices complete their programme. A completion rate below 60% is a warning sign.

Your Obligations as an Employer

Once the apprenticeship starts, you have obligations that are taken seriously by the ESFA:

Pay: Pay at least the apprentice NMW rate. Many employers pay above the minimum — this is good practice and reduces turnover. Apprentices who can earn more elsewhere leave.

20% off-the-job training: This is a hard requirement. ESFA defines "off-the-job training" as training delivered outside the normal day-to-day duties of the job. It must be planned, recorded, and make up at least 20% of contracted hours over the apprenticeship.

Common ways to satisfy this:

• Day release to college
• Block release (e.g. 2 weeks per term)
• Online learning (if structured and recorded)
• Attendance at industry events or toolbox talks

It is NOT satisfied by: working on a live job (even if learning), watching YouTube, or informal mentoring during normal work.

Mentoring: Assign a named mentor from your team — usually yourself as the employer on a small firm. The mentor should check in regularly on the apprentice's progress and liaise with the training provider.

Safe environment: You cannot put an apprentice at risk. Under 18s have specific restrictions on working hours, heavy lifting, and exposure to hazardous materials. Gas Safe, NICEIC, and Gas Alarms cannot be certified in an apprentice's name — they work under your supervision and certification.

Apprenticeship agreement: Both employer and apprentice sign this at the start. It is a legal document setting out the terms of the apprenticeship. Your training provider will usually prepare this.

Funding the Apprenticeship

For non-levy employers (payroll under £3m):

1. Register on the Apprenticeship Service — at https://manage-apprenticeships.service.gov.uk using your Government Gateway account
2. Add a training provider — once registered, you link to your chosen provider; they become the funding manager in many cases
3. Your 5% contribution — paid directly to the training provider, typically on a monthly or termly basis
4. Government 95% — paid directly to the training provider on your behalf from ESFA

You do not see the government's 95% directly — it flows to the training provider. Your only direct cost is the 5% co-investment plus the apprentice's wage.

Additional incentives (check current availability):

• £1,000 payment for hiring an apprentice aged 16–18
• £1,000 for hiring a care leaver
• Additional support for employing apprentices with special educational needs or disabilities

Managing an Apprentice Effectively

The most successful apprenticeships are those where the employer actively invests in the apprentice's development:

• Brief the apprentice clearly on what to expect each week
• Explain the reasons for tasks, not just the mechanics
• Allow them to practise skills, even if it's slower than doing it yourself
• Attend or stay in contact with the training provider; attend employer review meetings
• Set incremental expectations — a first-year apprentice cannot work at the pace of a qualified tradesperson
• Address attendance and attitude issues early; do not let poor behaviour develop into a conduct problem

Completing the apprenticeship: At the end of the programme, the apprentice sits an End-Point Assessment (EPA). This is independent of the training provider. Prepare the apprentice — find out what the EPA involves and ensure they have covered all the knowledge, skills, and behaviours (KSBs) in the apprenticeship standard.

Frequently Asked Questions

Do I need any specific qualifications or accreditations to take on an apprentice?

No specific qualification is required, but you must be a competent employer who can provide the appropriate on-the-job experience. For trade-specific apprenticeships, you should hold the relevant qualifications yourself (e.g. Gas Safe registration for a gas apprentice, NICEIC/NAPIT membership for electrical). Your training provider will assess your suitability as an employer as part of the setup process.

What if the apprentice doesn't work out — can I end the apprenticeship?

Yes, but with care. An apprentice is an employee and has employment rights. For the first two years, normal employment law on dismissal applies. An apprentice cannot be dismissed during their apprenticeship except for gross misconduct or fundamental breach of the apprenticeship agreement — courts have historically been protective of apprenticeships. Take HR advice before ending an apprenticeship. Redundancy of an apprentice during their apprenticeship requires careful handling.

Can I take on an adult apprentice (over 25)?

Yes — there is no upper age limit for apprenticeships. Adult apprentices are common in the trades, particularly those retraining from another career. The funding and employment rules are the same; the NMW for adult apprentices applies the standard NMW rate rather than the apprentice rate after the first year. Adult apprentices can bring significant life experience and often progress faster than school leavers.

What's the difference between an NVQ and an apprenticeship?

An NVQ (National Vocational Qualification) is an assessment-only qualification, typically done alongside work. It has no mandatory off-the-job training component. An apprenticeship is a funded training programme that combines employment, off-the-job training, and EPA. The resulting apprenticeship standard qualification is generally considered more rigorous and is government-regulated. Most trade apprenticeships result in both the apprenticeship standard certificate and a Level 2 or Level 3 NVQ as part of the package.

My apprentice is failing at college. What can I do?

First, speak to the training provider. A struggling apprentice often has a specific gap — literacy, maths, or a particular technical topic — that can be addressed with extra support. Training providers have obligations to support struggling learners. If the provider is not addressing it, escalate to their quality manager. If after support the apprentice continues to struggle, an early exit from the programme may be preferable to letting them fail the EPA — agree this jointly with the training provider and document the decision.

Regulations & Standards

• Apprenticeships, Skills, Children and Learning Act 2009 — legislative framework for apprenticeships

• Apprenticeship funding rules (ESFA) — detailed rules governing funding, eligibility, and employer obligations

• Working Time Regulations 1998 (as amended) — protections for young workers including hours limits

• Management of Health and Safety at Work Regulations 1999 — risk assessment obligations for young workers

• National Minimum Wage Act 1998 — minimum wage rates including apprentice rate

• GOV.UK — Recruit an apprentice — Official recruitment portal

• ESFA — Funding rules for apprenticeships — Detailed employer obligations

• Find Apprenticeship Training — Training provider and funding cap lookup

• CITB — Construction apprenticeships — Construction Industry Training Board guidance

• self employment tax — Tax implications of employing an apprentice

• cdm regulations — CDM requirements when apprentices are on construction sites

• manual handling — Young worker restrictions on manual handling

• public liability — EL insurance required when employing apprentices