Prime Minister Rishi Sunk is expected to expected to say Government will fully fund apprenticeships in small businesses from 1st April by paying the full cost of training for anyone up to the age of 21.
The move is part of a package of reforms to support businesses to deliver more apprenticeship places, cut red tape for SMEs and leverage more private investment in female founders, and he’ll reveal it at the Business Connect conference in Warwickshire today.
This will remove the need for small employers to meet some of the cost of training and saves time and costs for providers like 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, guaranteeing that where there is demand for apprenticeships from businesses, the government will ensure there is enough funding to deliver them.
From the start of April, the government will also 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 apprenticeship levy will be able to transfer up to 50% 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.
Hundreds of large levy-paying employers have already taken advantage of the opportunity to transfer their unused levy funds to other businesses. As of [December 2023], 530 employers including ASDA, HomeServe and BT Group have pledged to transfer over £35.39 million to support apprenticeships in businesses of all sizes since September 2021.
Taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people, and is part of our plan to build a stronger economy and deliver a brighter future where hard work is rewarded and young people get the skills they need to succeed in life.
This also builds on our record of transforming apprenticeships over the last decade. Since 2010, we’ve helped 5.7 million people start an apprenticeship, working with employers to develop almost 700 new high-quality standards and increasing the funding for apprenticeships to over £2.7 billion from next year.
Prime Minister Rishi Sunak said: “Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
“Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.
“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”
