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What you need to know about changes to apprenticeship funding

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The Government is hoping its package of apprenticeship reforms will create up to 20,000 more apprenticeships. But what does it mean for your business?

At a business conference in Warwickshire last month, Prime Minister Rishi Sunak announced a package of funding reforms to boost apprenticeships in the UK.

The headline moves are:

  • The Government will fully fund apprenticeships in non-levy paying small and medium-sized businesses (SMEs) from 1 April 2024, by paying the full cost of training for anyone up to the age of 21
  • From 1 April 2024, the Government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses
  • The Government is investing £60m to ensure that, where there is demand for apprenticeships from businesses, there is enough funding to deliver them
  • The Government plans to raise the threshold that defines a small-to-medium enterprise (SME) from 250 employees to 500 employees.

The Government is hoping that this reforms package will create up to 20,000 more apprenticeships. But what do they mean for businesses?

Changes to apprenticeship funding for SME (non-levy paying) businesses

The Government is investing £60m to fund the full cost of apprenticeships in small businesses (non-levy paying) for 16-21-year-olds.

It’s hoped that by removing the need for SME businesses to meet the costs of training, it will create more opportunities for young people.

If you own or work at a small business and want to learn more about hiring an apprentice, contact, call 0371 705 2157 or complete our contact form.

Changes to the apprenticeship levy

When the apprenticeship levy was introduced in 2017, it required employers with an annual wage bill of more than £3m to pay 0.5% of payroll costs into a fund for training. These levy paying employers could transfer up to 25% of their unused levy to SMEs to fund apprenticeships.

However, it wasn’t universally well-received with critics arguing that the money did not trickle down to fund schemes and that there was too much bureaucracy involved.

Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support SMEs to take on apprentices. The aim is to make it cheaper for smaller businesses to hire more apprentices and get the skilled workers they need. In conjunction with the increase in SME employee threshold, it should also allow more employers to access levy funding.

Since 2020 Total People has helped to fund 474 apprenticeships via the levy gifting scheme. We can help levy-paying employers ensure their funds reach the right places, and help non-levy paying employers to access these funds.

Just contact, call 0371 705 2157 or complete our contact form.

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