Government to fully fund apprenticeships for small businesses

18 March 2024 by
Government to fully fund apprenticeships for small businesses

UKHospitality has welcomed the government's apprenticeship reform package, stating changes will "benefit both businesses and employees".

Under the reforms announced on Monday, the government will fully fund apprenticeships in small businesses from 1 April by paying the full cost of training for anyone up to the age of 21.

Large employers who pay the apprenticeship levy will also now be able to transfer up to half of their funds to support other businesses looking to take on apprentices, instead of the current 25% cap.

The announcement follows £60m of new government funding into apprenticeships for the year ahead, which will raise the total apprenticeship fund to over £2.7b.

UKHospitality had called for more flexibility in the use of apprenticeship levy funds in last year's Spring Budget.

The government said the changes would enable the provision of up to 20,000 more apprenticeships, primarily for young people, as well as reduce costs for employers.

Kate Nicholls, chief executive of UKHospitality, said: "Investing in people is so important and it's one of the reasons we see so many people progress through the sector, going from bar to board in a matter of years.

"The changes to apprenticeships announced by the prime minister today are very positive. Removing the fee for non-levy payers and expanding the definition of SMEs will all benefit smaller businesses. Increasing the levy transfer amount to 50% will free up more funds to be used for training, rather than being left unused.

"Overall, there is much to be pleased about, and these changes will benefit both businesses and employees."

However, she warned the wider apprenticeship system was "structurally broken" and needed reform.

"The levy itself needs reform to allow businesses more flexibility with funding and I would urge the Government to make that a central pillar of its skills agenda," added Nicholls.

Martin McTague, national chair at the Federation of Small Businesses, added: "We welcome these very important announcements on apprenticeships.

"We have campaigned for more levy-paying businesses to be able to transfer their funds to small businesses in their supply chain, and for crucial support on costs, so we're pleased to see the prime minister make this intervention today."

The apprenticeship levy was introduced in April 2017 with the aim of raising £2.5b a year for training and three million new apprenticeships, but the industry has previously raised concerns over the dramatic drop in the number of apprenticeships following the launch of the scheme.

Image: Shutterstock

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