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Apprentices: Small Businesses

Question for Department for Education

UIN HL14352, tabled on 17 March 2021

To ask Her Majesty's Government what plans they have to increase the number of apprentices for which small businesses who do not pay the apprenticeship levy can claim cash incentives.

Answered on

29 March 2021

The government recognises the enormous value that small and medium-sized enterprises (SMEs) contribute to the UK economy. SMEs will play a key role as we look to rebuild from the effects of COVID-19, and to increase opportunities for young people to embark on apprenticeships.

In 2021-22 financial year, we are making available £2.5 billion to support apprenticeships in all employers, including employers that do not pay the levy who will continue to be able to reserve funding for 95% of apprenticeship training and assessment costs. From 1 April all SMEs arranging new apprenticeship starts will do so through the apprenticeship service, as levy payers do now, giving them more control over their apprenticeship choices and the ability to reserve funds before choosing the provider that best meets their needs.

From 1 April, all non-levy employer reservation levels will be reset to zero, enabling each employer who does not pay the levy to make up to 10 new reservations to fund new starts in the 2021-22 financial year. As part of the government's Plan for Jobs, we have increased the incentive payments to £3,000, meaning that employers who do not pay the levy will be able to reserve funds and claim incentive payments for up to 10 new apprentices hired between 1 April and 30 September 2021.

In 2020-21 financial year, funds transferred from employers who pay the levy to other employers are not included when measuring the number of reservations that smaller employers can make, so further incentive payments could be claimed for apprentices being funded through a transfer. From August 2021, levy-paying employers will be able to create a pledge of funds that they would like to make available for transfer. In August, we will also introduce a new online service to match levy payers with SMEs that share their business priorities allowing levy payers to support apprenticeships in their supply chains and help to meet local and regional skills needs.