Apprenticeship reforms a ‘benefit for both businesses and employees’

In a speech today (18 March), the Prime Minister announced that the Government will fully fund apprenticeships in small businesses from 1 April this year by paying the full cost of training for anyone up to the age of 21.

The move is underpinned by an additional £60m of new funding.

Additionally, the Government will increase the amount of funding 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.

Further deregulatory measures to simplify both non-financial and financial reporting for SMEs were also announced including an increase in the number of companies that qualify as a smaller or medium sized business through a 50% uplift to the thresholds that determine a company’s size.

“Overall, there is much to be pleased about, and these changes will benefit both businesses and employees,” says Kate Nicholls, chief executive of UKHospitality, who has long called for the reform of the Government’s apprenticeship levy​​.

“The people who work in hospitality are the beating heart of our sector and are the reason we can provide quality food, drink, experiences and service.

“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.”

However, despite the positive changes, Nicholls continues to call for a more robust overhaul of the apprenticeship system, which she describes as being ‘structurally broken’.

“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,” she adds.