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Chancellor ‘brings forward’ £700m apprenticeship package

The plan to halve the rate SMEs have to contribute towards apprenticeship training was announced last autumn

Chancellor Philip Hammond announced the changes to apprenticeship funding in the Spring Statement

The plan to halve the rate SMEs have to contribute towards apprenticeship training was announced last autumn

The chancellor told MPs that a £700 million package to help small and medium-sized enterprises invest in apprenticeships will be rolled out from next month.

In the Autumn Budget, Philip Hammond said that the amount small and medium-sized enterprises have to contribute towards apprenticeships will be reduced from 10 per cent to 5 per cent – a package that will cost £695 million.

In January the Treasury said there was no date fixed for halving SMEs' apprenticeship contributions to 5 per cent, but the chancellor has now confirmed the reforms will be introduced in the next financial year, which starts in April.

Apprenticeships cash

Delivering the Spring Statement, Mr Hammond said: “To help small businesses take on more apprentices, I can announce that am bringing forward the £700 million package I announced at the Budget to the start of the new financial year in April.”

 

He added: “Raising our productivity isn’t just about investing in physical capital, it’s about investing in people. The Augar Review will be published shortly and will be an important contribution towards our overall plan for post-18 education, the government will respond later in the year.

“We’re committed to returning technical and vocational skills to the heart of our educational system with the T level system on track to deliver the first three routes in 2020, the first phase of the national retraining scheme to be launched this summer and the apprenticeship programme rolling out 3 million new high-quality apprenticeships.

Chief executive of the Association of Employment and Learning Providers Mark Dawe said: "Our evidence was that employers were holding back on apprenticeship starts since the autumn budget announcement which might explain the overall falls happening again, so we welcome the fact that this measure is being introduced. The National Audit Office (NAO) has highlighted other fundamental issues we need to resolve and we look forward to working with the government on these."

Head of education and skills policy at the Confederation of British Industry (CBI) John Cope said clarifying when the cost of training for small and medium-sized employers is halved is a positive step from the chancellor, adding: "But there remains some important under the bonnet issues when it comes to reforming the apprenticeship system. 

“Reforms must enable, rather than frustrate companies to take on more apprentices. The CBI will continue to work with the government to fundamentally reform how the apprenticeship system works post-2020. Together we must ensure that firms of all sizes can offer high-quality apprenticeships in every sector.”

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