On Monday, Rishi Sunak announced significant funding for SMEs in the recruitment of Apprenticeships. From 01st April 2024 the government will support small businesses with the full cost of training for anyone up to the age of 21 - reducing costs and administrative burdens for businesses to deliver more opportunities for young people to kick start their careers.
The funding removes 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 bolstered by an additional £60 million of new government funding for 2025, 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. Currently, funding is available for apprenticeships with 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 vast 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.
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.” [1]
“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.”[2]
“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”[3]
Martin McTague, National Chair at the Federation of Small Businesses, said:
“We welcome these very important announcements on apprenticeships, as well as other action including helping more women start up in business. The Prime Minister is right to take decisive steps to support small employers do what they do best, providing jobs and opportunities in their local communities.” [4]
“Apprenticeships are an effective way of allowing small firms to recruit and up-skill talented people and these measures are a positive way to bolster the number of businesses taking on apprentices.”[5]
At Rico HR, we are experts at supporting our clients to navigate the recruitment, retention, and funding available when considering taking on an apprentice. If you would like further support or advice concerning apprenticeships, then get in touch!
[1] https://www.gov.uk/government/news/prime-minister-to-announce-major-reform-package-to-boost-apprenticeships-and-cut-red-tape-for-thousands-of-small-businesses
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
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