21 Mar

Government announces additional apprenticeship funding

On Monday (18 March 2024) we received welcome news from Rishi Sunak’s Government that the Government will fully fund apprenticeships in small businesses from 1st April. So instead of SME’s having to pay 5% of the cost, the Government will now pay the full cost of training for anyone up to the age of 21.

Certainly, anything that makes it easier for SMEs to employ young people is welcome. The suggestion is that this new regime will save time and costs for 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.  

It was also announced that from the start of April, the Government will 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. Jet2/Jet2 Holidays has done this very successfully with charities and businesses within their supply chain transferring £650 000 from unspent levy. An increase to this funding is a welcome move as any unused funding goes back into the Treasury after two years and this funding is not hypothecated for training and development, or indeed schools. 

Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of  their unused funds to support other businesses, including smaller firms, to take on apprentices. This could be a further benefit for SMEs, who may be able to benefit from this funding. 

The Government suggests, that taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people. 

However, the system needs to continually evolve and be driven by the needs of the industries served.  The aim of the apprenticeship programme is to increase opportunities for young people and existing staff, regardless of their background. The travel industry can offer such a wide range of careers and progression opportunities and access to increased funding can only be welcomed.