The government has announced reforms to the apprenticeship system in England, presenting exciting opportunities for business owners. These changes, aimed at increasing young people’s access to apprenticeships, include a new “growth and skills levy” that will replace the existing apprenticeship levy.

Here’s what you need to know, and how it could benefit your business.

Understanding the new growth and skills levy

The new levy is designed to give businesses greater flexibility in hiring and training apprentices. Currently, apprenticeships must last at least 12 months, which may not always suit your business needs. Under the revised system, funding for shorter apprenticeships will be possible, allowing you to create training programmes that align with your business requirements and your staff’s learning pace. This means new employees could be ready to contribute sooner, while still receiving valuable skills training.

New foundation apprenticeships

A key part of the reforms is the introduction of “foundation apprenticeships.” These apprenticeships aim to provide young people with a strong start in key sectors, allowing them to earn a wage while gaining essential skills. The reforms clearly encourage employers to invest in younger workers, who are often motivated and eager to learn. With government support for their training, this could be a great opportunity for your business.

What does this mean for your existing apprenticeship plans?

To fund the new system, employers will need to adjust their apprenticeship funding, particularly by investing more in younger workers. For level 7 apprenticeships (those at the master’s degree level), businesses will need to contribute more from outside the levy. These advanced apprenticeships are often pursued by older or more qualified employees. If your business relies on level 7 apprenticeships, it’s wise to start planning how you might allocate funds to cover more of these costs directly.

What does Skills England’s report mean for you?

Skills England has also published its first report, highlighting the skills shortages in the UK economy. The report reveals that employer investment in training has fallen by 19% in real terms since 2011, and 1 in 10 jobs are now in “critical demand,” with more than 90% requiring training or education. This may serve as a wake-up call for many businesses. Investing in training now could give you a competitive advantage in filling these essential roles.

By embracing the new apprenticeship reforms, your business could get ahead, securing the skilled workforce necessary for long-term success.

In summary: key takeaways for your business

  • The new growth and skills levy offers flexibility, allowing for shorter apprenticeships tailored to your needs.
  • Foundation apprenticeships could give your business access to a pool of young talent.
  • Employers will need to fund more of their level 7 apprenticeships, so plan your budget accordingly.
  • Skills England’s report highlights significant skills gaps, making it a prime time to invest in apprenticeships to gain a competitive edge.

With these changes approaching, keep an eye on further announcements from the Department for Education regarding how the new system will operate. In the meantime, if you’re looking to grow your team or upskill your workforce, these apprenticeship reforms could be the perfect opportunity to take advantage of.

See: https://www.gov.uk/government/news/prime-minister-overhauls-apprenticeships-to-support-opportunity