Small businesses will now have all their apprenticeships fully funded for those under the age of 21.
The government has
announced it will now pay the full cost from 1st April, as part of a major package of reforms aimed at small employers and SMEs.
Announced by the Prime Minister in his first economic speech since the Spring Budget, the aim is to reduce business expense and red tape and help kickstart the careers of young people by providing more opportunities.
Enough Funding to Deliver
- The initiative is supported by an extra £60 million government funding, allocated for 2025, to ensure money is there to fulfil business demand for apprenticeships.
- It’s estimated that this will enable up to 20,000 more apprenticeships, intended to particularly benefit small business and younger apprentices.
- The apprenticeship levy has also been changed to allow more flexibility and make it easier for smaller businesses to access levy money that hasn’t been used.
The levy is a form of taxation and used to fund apprenticeship training so that more companies can be supported to offer this. Funding is accessed via an approved training provider.
Employers with a payroll of more than £3 million are charged at 0.5% of their total payroll. Smaller firms can benefit from large levy-paying employers transferring their unused levy funds to them.
The transfer allowance has now increased from 25% to 50%, allowing a greater share to be passed on.
Employer Concerns
According to
City & Guilds, barriers to accessing the funds have long been a concern, with 96% of employers wanting to see a change to the levy. Research, published by City & Guilds in 2023, showed only 4% of employers were spending their full apprenticeship levy funding.
Industry reaction to the new measures has been generally favourable and seen as a step in the right direction. However, calls for a more robust overhaul of the system are still ongoing from several sectors, including hospitality and
engineering.
Who Are Apprenticeships For?A mix of both on-the-job and off-the-job training, apprenticeships take between one and five years to complete, and are available to anyone over the age of 16, not already in education. Apprentices are not just school leavers and can be employed at different levels - whether that’s a graduate or someone who wants a change of career.
In the 2022/23 academic year, there were 752,150 people participating in an apprenticeship in England. 48% of the apprenticeships started in 2022/23 were by people aged 25 and over, while 23% were aged under 19 and 29% were aged between 19 and 24.
The National Minimum Wage for Apprentices applies. Employers can choose to pay more and this may form part of a stepped progression linked to performance. Just like all other employees, apprentices have a contract of employment and are
entitled to holiday leave.
Apprenticeships help business attract new talent and can be a good way to address skills shortages as part of an overall strategy. Training can be adapted to the employer’s needs, which makes this an effective way to create a more productive and relevant workforce.
Manage Your People
Managing a flexible workforce can create challenges for organisations as each type of flexible working may require different arrangements, locations and working hours.
WorkSmarter offers a simple, affordable and more effective way to manage people tasks - such as holidays, absences and
time and attendance.
An intuitive and secure platform gives SMEs the right tools for the job, connecting teams through dynamic tech solutions and making it easier to comply with complex, ever-changing legislation.
