Treasury unveils reforms to apprenticeship levy

The government has raised the amount of the apprentice levy that larger companies can transfer to smaller firms in their supply chain from 10% to 25% in a bid to make the scheme more accessible

‘The changes are aimed at providing flexibility for businesses so they can take full advantage of the benefits of employing apprentices, and to help as many people as possible find the right training to equip them for the new economy,’ said a government spokesperson.

The move, announced by Chancellor Philip Hammond as the Conservative Party conference on Monday, will see an extra £90m of government funding made available to enable employers to invest a quarter of their apprenticeship funds on people working for businesses in their supply chain.

‘The government has worked closely with business groups to ensure the apprenticeship levy works for employers who are at the heart of delivering this move to world-leading training. In the coming weeks, the government will set out a process to seek views on the operation of the levy after 2020 to ensure it supports the development of the skilled workforce businesses need for the new economy,’ said the spokesperson.

The reforms met with some criticism from business leaders with the British Chambers of Commerce saying the levy figure should be 50%.

Carolyn Fairbairn, director-general of the CBI business lobby, said: ’...more is needed. The government must act now to deliver a meaningful review of the levy that demonstrates it will continue to collaborate with companies and with a well-funded National Retraining partnership delivered with the CBI and TUC, plus T levels and a revitalised careers strategy, the UK’s skills system could fire on all cylinders.’

A further £5m was announced for the Institute for Apprenticeships to introduce new standards and updating existing ones so that more courses can be offered – meaning more choice for those considering their training options. The government will discontinue the old frameworks so that all new apprenticeships will be on the same higher-quality standards by the start of the 2020/21 academic year.

Report by Rob Munro

Rob Munro |Journalist and contributor, Accountancy

Rob Munro is a journalist specialising in finance, health and technology. He has worked for several major publishers, including Wile...

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