The government has revealed radical new plans in a shake up of the way apprenticeships are funded.

The new scheme would see employers funded directly in order to purchase the apprenticeship training they want as part of proposals to give businesses more control.

The plans announced by business secretary, Vince Cable, will give employers the freedom to choose the training that is most relevant to the needs of the apprentices and their businesses, and which represents the best value.

At the moment, three options have been suggested, the first being a direct payment model, which would see businesses register apprentices and report claims for government funding through a new online system. Funds would then be paid directly to them.

The second option would see the use of a PAYE payment model. Businesses would register apprentices through a new online system and then recover government funding through their PAYE return.

The final option would see government funding continuing to be paid to training providers, but they would only be able to draw it down when they receive the employer's financial contribution towards the training.

SkillsActive CEO, Ian Taylor commented on the plans, stating: “SkillsActive has been invited by the Government to take part in a very important consultation to look at the proposals for the future of Apprenticeship funding. Our employers know how apprenticeships boost productivity and competitiveness, and are an important tool in building economic growth. The National Audit Office recently concluded that adult apprenticeships deliver £18 of economic benefit for each pound the government invests. Few government programmes can boast such value for money. This is why we will work with our employers and endorsed providers to ensure that this consultation receives a comprehensive response to inform the Government of our sectors views and requirements to ensure the successful delivery of the highest quality apprenticeships”.