Major reform for apprenticeships coming soon

  • Business Advice
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Peninsula Team, Peninsula Team

(Last updated )

The Government will fully fund apprenticeships in small businesses from 1 April and will also increase the amount of funding that employers who are paying the Apprenticeship Levy can pass onto other businesses.

Speaking at the Business Connect conference in Warwickshire, Prime Minister Rishi Sunak announced what he called a major package of reforms to support businesses to deliver more apprenticeship places and to cut red tape for SMEs.

He said that the Government will fully fund apprenticeships in small businesses by paying the full cost of training for anyone up to the age of 21. This will remove the need for small employers to meet some of the cost of training and will save time and costs for providers such as further education colleges who currently need to source funding separately from the Government and businesses.

The move is underpinned by an additional £60 million of new government funding for next year.

Also from the start of April, the Government will increase the amount of funding that employers who are paying the Apprenticeship Levy can pass onto other businesses. Apprenticeships can currently be funded by a levy-paying employer transferring up to 25% of their unused levy to a different employer.

Under the new measures, large employers who pay the levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices.

Hundreds of large levy-paying employers have already taken advantage of the opportunity to transfer their unused levy funds to other businesses, the Prime Minister pointed out. As of December 2023, and since September 2021, 530 employers — including Asda, HomeServe and BT Group — had pledged to transfer over £35.39 million to support apprenticeships in businesses of all sizes.

Education Secretary, Gillian Keegan, said: “Apprenticeships are a fantastic way for businesses to develop the skills they need, and these new measures will help more businesses and young people benefit from them.”

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