There will be an extra £80 million released to help small businesses recruit apprentices, the chancellor has announced in his spring statement to Parliament.
“We are committed as a government to delivering three million apprenticeship starts by 2020 with the support of business through the apprenticeship levy,” said Philip Hammond.
The levy was launched last April for large employers, and concerns have been raised since about its impact on starts and that the system has become too heavily orientated towards big business and their apprenticeships needs.
It is currently paid by employers with an annual payroll of £3 million or more, and is set at 0.5 per cent of this cost.
“We recognise the challenges the new system presents to some small business looking to employ an apprentice,” Mr Hammond said.
“I can therefore announce today that the education secretary will release up to £80 million of funding to support small businesses in engaging apprentices.”
The Treasury later confirmed that this was not new funding but would be taken from the existing Department for Education apprenticeship budget. There was no new funding announced in the spring statement.
The £80m was already in the £650m non-levy pot to last between January 2018 and end-March 2019. There has just been a growth bidding round for contracted colleges and providers and the Association of Employment and Learning Providers (AELP) said that the £80m is likely to be the money that will be earmarked for that.
AELP chief executive Mark Dawe said, ‘Our early understanding is that this is growth money within the £650m funding already promised. While any growth funding is very welcome, until the Government remove the 10 per cent employer contribution for under 24 apprentices and commit to an annual non-levy budget of £1bn, the apprenticeship starts are not even going to reach the level they were before the levy was introduced - let alone exceed them.’