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SMEs apprenticeships costs halved

6 November 2018

SMEs apprenticeships costs halved

In this autumn's budget statement chancellor Philip Hammond announced a package of reforms to ensure the Apprenticeship Levy provides people with the skills they need to succeed.

From April, large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices in their supply chain.

Small and medium employers will pay half of what they currently pay for apprenticeship training – from 10% to 5%. The government will pay the remaining 95%. Although at first it was announced that this will be in effect from April 2019, the Treasury has since backtracked and said that further details on when this will be available will be announced in early 2019.

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.

A further £5 million 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.
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.
The apprenticeship levy is making good progress – with 1.41 million apprenticeships started since May 2015. There were over 161,000 starts reported on apprenticeship standards in 2017/18 (provisional), more than six times higher than in 2016/17.
The government has also announced plans for establishing a National Retraining Scheme - during this Parliament - to support adults across the country and equip the workforce with the skills needed for the new economy. While this scheme is developed, the government is also funding additional projects including £30m to test the use of AI and innovative Edtech, and £34m for construction skills funding.
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