The government has announced a series of Apprenticeship Levy reforms following calls from business leaders for the scheme to be more flexible. These reforms will include additional funds for the development of apprenticeship standards.
£90 million of funding will be freed to enable employers to transfer 25% of their apprenticeship funds to employees of businesses in their supply chain. This is an increase from the previous 10% that employers could invest in non-levy paying organisations.
An extra £5 million for the Institute for Apprenticeships will allow the introduction of a range of new standards. There will also be greater investment in apprenticeships in science, technology, engineering and mathematics (STEM) subjects.
The government will discontinue the old frameworks so that all new apprenticeships will be on the same higher-quality standards by the start of the 2020/21 academic year.
Allowing Businesses More Flexibility
Discussing the reforms at the Conservative party conference in Birmingham, Chancellor Philip Hammond said: “We have heard the concerns about how the apprenticeship levy is working… so today we’ve set out a series of measures to allow firms more flexibility in how the levy is spent.
“But we know that we may need to do more to ensure that the levy supports the development of the skilled workforce our economy needs. So in addition to these new flexibilities, we will engage with business on our plans for the long-term operation of the levy.”
Sir Gerry Berragan, chief executive of the Institute for Apprenticeships, said: “The Institute has made huge strides this year and approved the 350th apprenticeship standard, taking us beyond the number of standards available in Switzerland and Germany – both of whom have very mature apprenticeship systems.”
“This investment is not only a great endorsement of the work the Institute has done over the past 18 months, but also the efforts of all the employers who have developed these new apprenticeship standards.”
The government will set out a process to seek views on the operation of the levy after 2020 to ensure it supports the development of a skilled workforce.
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