In his first economic speech since the Spring Budget, UK prime minister Rishi Sunak set out a major package of reforms to support businesses deliver more apprenticeship places, seeking to aid SME’s in the process.

In his announcement, Sunak noted that the 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, seeking to reduce costs and burdens for businesses while ‘delivering more opportunities for young people to kick start their careers’.

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. 

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Commenting on this, AICPA & CIMA vice president for international advocacy, Michelle Mullen, said: “We welcome the government’s commitment to fully fund apprenticeships in small businesses for anyone up to the age of 21. We hope the funding will be made available up front, so that small businesses will be able to take advantage of it without experiencing a negative impact on their already stressed cash flows. In time we hope to see support for apprentices of all ages, because upskilling our workforce is critical to generate the productivity gains we need to see in the economy.

“We are especially pleased by the increase in the percentage of unspent Apprenticeship Levy funds which can be transferred to another business. This is something we have been advocating for, and we welcome the government’s new measures, which will widen access to apprenticeships and help upskill the workforce to meet the needs of the modern marketplace.”