What Do New Apprenticeship Funding Reforms Mean For Providers?

With an announcement as striking as the UK government enabling up to 20,000 more apprenticeships with a focus on small businesses and young adults, naturally, it will pique the interest of providers, businesses and course designers alike.

The announcement, made at the Business Connect conference, pledged £60m worth of new funding for apprenticeships starting in 2025 and a statement that they will fund any small business apprenticeship training for any employee under the age of 21, although these were not the only proposals.

The most striking part of the proposal is that any young person who wants to choose an apprenticeship as their education and employment pathway after leaving high school can do so at no cost to a small business, incentivising and creating more opportunities.

Whilst apprenticeships are for everyone, not just teenagers and young adults, it is a promising step that highlights just how many opportunities are available away from higher education.

As well as this, large employees who are subject to the apprenticeship levy can transfer up to half of the allowance they have built up to other companies to allow for more funded apprenticeship positions.

The final big proposal, one that has consequences beyond apprenticeships, is the extension of the definitions of small and medium-sized enterprises (SMEs).

At present, a small business employs 50 people or fewer and has a turnover of less than £10.2m, but at the same conference, the government announced that this threshold will rise by 50 per cent to 75 people and £15.3m. The same proportionate rise has been proposed to apply to medium-sized businesses as well.

This means that more companies qualify as small businesses and as a consequence will have access to fully-funded apprenticeships under other parts of the reforms.

Apprenticeships have been widely seen as a way for people to get a headstart in their careers through a combination of in-class education and on-the-job training, and the greater access people have to courses, the larger the net benefit.