UKHospitality has welcomed the government’s apprenticeship reform package, stating changes will “benefit both businesses and employees”.
In his first economic speech since the Spring Budget, the Prime Minister set out a major package of reforms to support businesses to deliver more apprenticeship places, cut red tape for SMEs and leverage more private investment in female founders at the Business Connect conference.
The Government will fully fund apprenticeships in small businesses from 1st April by paying the full cost of training for anyone up to the age of 21 – reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.
This will remove the need for small employers to meet some of the cost of training and saves time and costs for providers like further education colleges who currently need to source funding separately from the government and businesses.
The move is underpinned by an additional £60 million of new government funding for next year, guaranteeing that where there is demand for apprenticeships from businesses, the government will ensure there is enough funding to deliver them.
From the start of April, the government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses. Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer.
Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices. This will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people in a huge range of sectors, industries, and professions.
Hundreds of large levy-paying employers have already taken advantage of the opportunity to transfer their unused levy funds to other businesses. As of [December 2023], 530 employers including ASDA, HomeServe and BT Group have pledged to transfer over £35.39 million to support apprenticeships in businesses of all sizes since September 2021.
Taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people, and is part of our plan to build a stronger economy and deliver a brighter future where hard work is rewarded and young people get the skills they need to succeed in life.
This also builds on our record of transforming apprenticeships over the last decade. Since 2010, we’ve helped 5.7 million people start an apprenticeship, working with employers to develop almost 700 new high-quality standards and increasing the funding for apprenticeships to over £2.7 billion from next year.
Prime Minister Rishi Sunak said: Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.
Taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people, and is part of our plan to build a stronger economy and deliver a brighter future where hard work is rewarded and young people get the skills they need to succeed in life.
This also builds on our record of transforming apprenticeships over the last decade. Since 2010, we’ve helped 5.7 million people start an apprenticeship, working with employers to develop almost 700 new high-quality standards and increasing the funding for apprenticeships to over £2.7 billion from next year.
Kate Nicholls, Chief Executive of UKHospitality, said: “The people who work in hospitality are the beating heart of our sector and are the reason we can provide quality food, drink, experiences and service.
“Investing in people is so important and it’s one of the reasons we see so many people progress through the sector, going from bar to board in a matter of years.
“The changes to apprenticeships announced by the Prime Minister today are very positive. Removing the fee for non-levy payers and expanding the definition of SMEs will all benefit smaller businesses. Increasing the levy transfer amount to 50% will free up more funds to be used for training, rather than being left unused.
“Overall, there is much to be pleased about, and these changes will benefit both businesses and employees.
“However, the reality is that the entire apprenticeship system is structurally broken. The levy itself needs reform to allow businesses more flexibility with funding and I would urge the Government to make that a central pillar of its skills agenda.”
On top of this, SMEs will be supported to invest and grow through a £200 million extension of the Growth Guarantee Fund, helping 11,000 small businesses to access the finance they need.
At the Autumn Statement we protected over one million small businesses from a business rates increase for the fourth consecutive year. We are now supporting small businesses for the next five years with the cost of their business rates through a £4.3 billion package. This includes freezing the small business multiplier at 49.9p for a fourth consecutive year, saving an average shop £1,650, and protecting over a million rate payers from a 6.6% increase on their bills.
We have extended the Retail, Hospitality and Leisure business rates relief for a fifth year, meaning 230,000 properties will receive a 75% relief, up to a cap of £110,000 per business. This support is worth £2.4 billion and will protect small businesses including cafes and high street shops, and meaning the average independent pub saves over £13,000. The Small Business Rates relief has also taken over 700,000 businesses out of paying business rates completely.
Last month, the Department for Business and Trade held the first meeting of the newly established Small Business Council which acts as a powerful voice for small businesses within Government and has been tasked with overseeing three key areas for small firms – access to finance, skills and support as well as removing barriers.
The Help to Grow campaign website has also been relaunched and refreshed, as a one-stop shop for SMEs to find the information they need to grow and scale up. This includes helping small firms to clearly identify what funding they can access, helpful webinars as well as the basics of how to set up a business for the first time.
