UK Government Unveils Changes in Apprenticeship Funding System

UK Government Unveils Changes in Apprenticeship Funding System

The UK Government has unveiled new reforms to its apprenticeship funding system as part of its drive to create 3 million new apprenticeships by 2020. Underpinning the apprenticeship levy, due to be implemented from May 2017, the new UK funding policy has been developed with the aim of delivering a much needed investment in skills.

Amongst other reforms introduced by the new funding policy, government is aiming to help a greater number of young people develop valuable skills through apprenticeships, with 100% of training costs to be paid by government for smaller employees who take on an apprentice aged 16 to 18 years old. Costs will also be covered for small employers taking on apprentices between 19 and 24 who were in care or with an education and health care plan and government contributions will be provided for larger companies training young people in care and from the most deprived areas.

The controversial apprenticeship levy will be set at 0.5% of the pay bill, to be payable by employers with a bill of more than £3 million. Employers who are not eligible to pay will continue to receive government support towards the costs of apprenticeship training and assessments. The levy will apply to all UK employers, however, the apprenticeship funding policy will be devolved, with administrations able to decide how they use the levy income.

Skills Minister Robert Halfon said, “Apprenticeships work. The reforms we are rolling out will guarantee support from employers and government, so that millions of people can get the apprenticeships, skills and jobs for the future. […] Our apprenticeship levy will boost our economic productivity, increase our skills base and give millions a leg up on the ladder of opportunity – over 90% of apprentices currently go into work or further training. Making Britain a world leader on apprenticeships is essential if we truly want a country that works for everyone.”

Graeme Dryden, Technical Services Manager at APHC, commented, “It’s encouraging to see further evidence of government’s commitment to creating apprenticeships, and these latest policies certainly appear new and fresh, with good opportunities for smaller employers to engage with apprenticeship training. However, with regards to the levy we should be mindful of larger employers in our industry, whose tight margins and financial pressures can make it difficult to recruit and train young people as it is. The Government has set a challenging target of creating 3 million apprenticeships by 2020. Will it be met? Only time will tell.”