At a recent conference, Prime Minister, Rishi Sunak, unveiled a series of pivotal changes set to revolutionise the apprenticeship industry that will be going into affect from 1 April. This blog post explores these changes and what they might mean for you as a stakeholder.
Fully Funded Training for Individuals under 21 years old.
On 1st April, SME’s will pay nothing towards the training costs of apprentices under the age of 21 that enrol on a programme, compared to the current 5% they are expected to contribute.
What does this mean for you?
This initiative empowers small businesses to invest in their younger workforce without incurring additional training costs, thereby enhancing their skills and ability. Consequently, this enriches organisational capabilities and fosters a culture of continuous growth and development.
Raising the Apprenticeship Levy Gifting
Apprenticeship Levy Gifting, a mechanism enabling levy-paying organisations to allocate some of their surplus levy funds to smaller organisations, is undergoing a significant enhancement. The percentage of levy that can be gifted is set to increase to 50%, doubling the current allocation of 25%.
What does this mean for you?
This increase in levy-gifting opportunities addresses longstanding inefficiencies within the levy system, ensuring that more of the unused funds can be gifted to non-levy organisations who will use this money for its purpose of providing training opportunities. By maximising the utilisation of levy funds for training initiatives, it ensures alignment with the core objective of enhancing skills and employability, rather than the accumulation of dormant capital.
Rise in qualifying as an SME (Effective in the Autumn)
A Small-Medium Enterprise currently stands as an organisation under 250 employees, with an annual turnover of no more than £36m and a balance sheet total of no more than £18m. Raising the ability to qualify as an SME by 50% aims to encompass an additional 132,000 businesses under the SME umbrella, thus exempting them from non-financial reporting obligations.
What does this mean for you?
By broadening the eligibility criteria for SME status, businesses stand to benefit from reduced regulatory burdens, resulting in estimated annual savings of approximately £150 million. This streamlined regulatory environment fosters an ecosystem conducive to entrepreneurial growth and innovation, with SME’s being named as the “engines of economic growth.”
Changes creating opportunity for the apprenticeship industry
In summary, the government's measures are set to catalyse the creation of 20,000 new apprenticeships, helping to address critical skill shortages and mitigate unemployment challenges.
Mr Sunak believes that by implementing these measures, and investing £60m into the industry, it will create "a tidal wave of opportunity, and make a real difference to businesses and entrepreneurs across the country".
If you would like further clarification on how these changes will benefit your organisation, please contact one of our friendly team who will be happy to discuss the new opportunities that we can help to implement in your organisation.