Cutting the red tape for apprenticeships

The government will fully fund apprenticeships in small businesses from April 2024, paying the full cost of training. The move is intended to reduce costs for businesses and give young people a good start in their working lives. Where there is demand for apprenticeships from businesses the government says it will provide enough funding to deliver them. 

 

The announcement means small employers won’t have to contribute to the cost of training. It also means that providers like further education colleges won’t have to find separate funding from government and businesses. 

 

In April 2017 the government introduced the Apprenticeship Levy to help fund plans to increase the number and quality of apprenticeships. 

 

The idea was to give employers control of apprenticeship funding to encourage them to invest. Employers whose annual payroll bill is over £3million pay 0.5% per month to the Levy. 

 

All employers have access to the Apprenticeship Service online, whether or not they pay the Levy. It’s used to manage available government funding to pay for apprenticeship training. All Levy-paying employers receive a 10% top-up to their online account, funded by government. Employers with an account have 24 months to spend their funds, including any top-ups. 

 

Originally, Levy-paying employers could transfer up to a quarter of their unused apprenticeship funding to a different employer. Under the government’s new measures, large employers who pay the Levy can now transfer up to half of their unused funds. This is intended to help other businesses take on apprentices, including smaller companies. 

 

Government figures for December 2023 show that over 530 large employers have pledged to transfer over £35million since September 2021. The money has helped support apprenticeships in all types of businesses. 

 

Taken together, the government expects its new measures to provide up to 20,000 more apprenticeships, mainly for young people. 

 

Apprenticeships have evolved and don’t only focus on trades these days. For example, apprenticeships can include administration, nursing, marketing, law or project management. They now cover almost three quarters of occupations in the UK. 

 

Apprenticeships help businesses develop the skills they need and young people gain important workplace experience and training. They encourage young people to enter an industry and businesses can set the standards they want their employees to meet. 

 

Recruiting new employees is an expense for businesses both in terms of time and money. Taking on apprentices is a cost-effective way to develop your workforce. With grants available an apprenticeship programme is a good way to tackle skills gaps and build up your talent pool. You can even develop industry leading skills by working with training providers. You can also recruit people with diverse backgrounds and improve staff retention. However, worryingly, six out of 10 businesses don’t currently employ apprentices. 

 

Ascendant Recruitment is now in its 22nd year. We’re happy to use all our knowledge and experience to help you realise the full potential of apprenticeships.