The Government Announces Apprenticeship Levy Reforms
Apprenticeship Levy reform
In this week’s expenditure announcement, PM Rishi Sunak confirmed that the government will scrap the 5% co-investment currently expected of small and medium-sized businesses.
In his speech at the Small Businesses Conference he also announced plans to increase the amount of funding that can be transferred from apprenticeship levy-payers to other businesses from 25 per cent to 50 per cent.
Sunak stated that these changes amount to £60 million new investment to enable up to 20,000 more apprenticeships, including for young people and small businesses.
It is hoped that the announcement will encourage more SMEs to hire apprentices, as starts among young apprentices have also fallen dramatically since the launch of the levy in 2017.
Announcing the move to a 50 percent transfer limit, the government said: “Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50 percent of their funds to support other businesses, including smaller firms, to take on apprentices.
“This will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people in a huge range of sectors, industries, and professions.”
The transfer increase is expected to come into effect from April 6.
In addition, the Department of Education’s budget for apprenticeships is increasing to “over £2.7 billion” in 2024-2025 (although an exact figure is yet to be published).
Chris Perry, CEO of the Swarm Group adds,
“Swarm welcomes the government's much needed increased investment into Apprenticeships, and looks forward to seeing the positive effects it will have in the workplace.
The extra funding will allow for more opportunities for young learners and small businesses to acquire new skills to become strong and successful.”
If you’d like to know more about how Apprenticeship Training is funded, do get in touch with our team. Click here to arrange a chat.
