The government has pledged £2.5 billion of funding for apprenticeships and further improvements for employers.
In his spending review speech in Parliament today, chancellor Rishi Sunak said the government would “improve the way the apprenticeship system works for businesses”. The documents published alongside the speech set out that from August of next year, employers that pay the apprenticeship levy will be able to transfer unspent levy funds “in bulk” to small and medium-sized enterprises (SMEs) with a new “pledge function”.
“Unspent levy funds will still expire after 24 months,” the documents add. “The government will also introduce, from August 2021, a new online service to match levy payers with SMEs that share their business priorities.”
Spending review: Chancellor announces new funding for skills
Opinion: Why teachers need a pay rise
Kate Green: Levy not delivering for young people
From April, the government will allow employers in construction, followed by health and social care, to front-load training for certain apprenticeship standards. “The government will explore whether this offer can also be made available in other sectors," the documents say.
During 2021-22, the government will “test approaches to supporting apprenticeships in industries with more flexible working patterns, including consideration of how best to support apprenticeship training agencies”.
Apprenticeship incentive payments extended
The chancellor also announced today that incentive payments for hiring a new apprentice introduced in the Plan for Jobs will be extended to 31 March 2021. These were first announced this summer in response to the economic impact of the coronavirus pandemic. Businesses are paid £2,000 per apprentice for each young apprentice they hire, and £1,500 for every apprentice aged 25 or over.
Businesses and providers have long asked for more flexibility to be introduced around the apprenticeship levy, which is paid by all large businesses around the UK.
Jane Hickie, managing director of the Association of Employment and Learning Providers, said: “We know the pressures on the public finances are huge and we welcome the employer incentives for apprenticeships, but AELP remains very concerned that, without wage subsidies, apprenticeship opportunities are going to remain scarce when Kickstart appears more attractive to employers and young people.
“We need to see the details behind the other apprenticeship measures before we comment in detail, but we hope that the levy transfer scheme isn’t regarded as a panacea for funding the apprenticeships of smaller businesses.”