SMEs will no longer have to contribute to apprenticeship costs for 16–21-year-olds from April 1

Published 20th Mar 2024 by PB Admin

From April 1, 2024, the UK Government has committed to fully funding the training costs for young people aged 16–21, meaning small and medium-sized (SME) employers such as beauty salons will no longer have to contribute to the cost of apprenticeship training for this age group.

In his first speech since the Spring Budget announcement, Prime Minister Rishi Sunak set out a package of reforms designed to support businesses to deliver more apprenticeship places and cut red tape for SMEs.

The major change for SMEs is that the Government commited to fully fund apprenticeships in small businesses from April 1, by paying the full cost of training for anyone up to the age of 21.

Currently salons and other small businesses are required to contribute toward apprenticeship training costs. 

The Prime Minister said, "Apprenticeships benefit young people and the businesses who hire them.

"But for SMEs, the system can be expensive and confusing, despite huge progress. So, to ensure funding is available where there is demand for apprenticeships…we’re increasing the apprenticeships budget by £40m.

"And for small businesses hiring young apprentices we will now fund the cost of their training in full.

"This will cut costs for business and training providers and support thousands more young people to start an apprenticeship."

From the start of April, the Government will also augment the funding available for larger employers that are subject to the apprenticeship levy to redistribute to other businesses.

Currently, levy-paying employers can allocate up to 25% of their unused levy to another employer to fund apprenticeships.

With the proposed changes, these large employers will have the flexibility to transfer up to 50% of their funds to support other businesses, including smaller enterprises, in hiring apprentices.

This initiative aims to reduce costs for SMEs, enabling them to employ apprentices, and to expand opportunities for young individuals across more sectors.

Collectively, these measures aim to generate up to 20,000 additional apprenticeship positions.

"This will cut costs for business and training providers and support thousands more young people to start an apprenticeship."

PB Admin

PB Admin

Published 20th Mar 2024

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