Apprenticeship numbers cap removed for small businesses

Organisations face more challenges than ever: from attracting and retaining top talent to managing change and uncertainty.

When the Apprenticeship Levy was first implemented in 2017, employers’ levy tax was set aside for companies to access, provided it was used for approved apprenticeship training.

This was all well and good for large corporates, but what about smaller companies? In a recent letter, Robert Halfon, Minister of State for Skills, Apprenticeships and Higher Education confirmed that from the 3 April 2023 smaller organisations which do not pay the levy will not be limited to a maximum of 10 apprenticeships.

Head of Henley Post-Experience Programmes, Dr Anne Dibley, says, “We really welcome this change. While we are proud of the diverse range of large corporations we are able to partner with, we fully believe in supporting smaller businesses in our local area. Many of our alumni members have used their learning from Henley to launch their own businesses. We are passionate about enabling all learners to develop personally and professionally, and we would like to offer apprenticeship opportunities to employees at all stages of their careers. Both the learners and their businesses will benefit from the new knowledge, skills and behaviours they will gain, during their Henley learning experience.

There are ways that SMEs can take advantage of the apprenticeship levy scheme.

If a business has a pay bill of under £3 million, they can access 95% of funding from the Government towards training for up to ten employees, but they will need to contribute 5% of the apprenticeship costs. Additional costs may apply based on the vocational sector and type of qualification, and it’s worth noting employers cannot salary sacrifice this from the apprentice. 100% of the cost of apprenticeship training is provided by the Government for businesses with fewer than 50 employees or if the apprentice is aged 16-18.

SMEs should also look to partner with large levy paying organisations as these larger organisations can transfer unused apprenticeship funds to other organisations including SME’s.

Apprenticeships don’t just have to be for new and young employees. They are potentially available to all, provided employers can evidence a need for new learning. Apprenticeships are a great way to invest and up-skill existing employees, helping organisations improve their employee engagement. However, the UK has an ageing workforce, so it is vital that organisations look to build the capability of their future managers and leaders by recruiting young people too. New employees can bring fresh ideas and help drive positive innovation and change.

Organisations must take a strategic look at their company targets and goals. Senior teams should review the knowledge, skills and behaviour gaps in their workforce before identifying the apprenticeships that will deliver maximum benefit for the business.

There are nearly 800 apprenticeship standards from levels 2-7. The Institute for Apprenticeships (IfATE) is the place to see which apprenticeship standards are currently running. Each standard will also have a list of Education Skills Funding Agency (ESFA) approved training providers that employers can choose from - some standards will have multiple training providers.

Employers should consider the duration of these apprenticeships (including the end-point assessment) and whether they can fully support the apprentice over this time frame. Individual apprentices will also have different preferred learning methods, so employers should check how the training provider delivers the learning. When recruiting a new employee, employers should check if the individual is eligible to receive apprenticeship funding for that particular apprenticeship programme.

Individual apprentices are often highly committed individuals, but they need the support of their organisations, especially their line managers. Ensuring the line manager is committed to supporting the apprentice with the application of learning and allowing them to apply their new skills and behaviours to their roles is crucial for success. Find a training provider with supportive apprenticeship tutors who will work with the apprentice and the line manager to help facilitate this.

There is plenty to consider when thinking about offering apprenticeships to employees. SMEs new to apprenticeships should take the time to read through all the information available on the Government website. A good training provider can also help sift through what individual organisations need to know.

At Henley Business School, we work with over 200 employers to overcome their business challenges, drive growth and develop future-focused leaders. Our apprenticeships combine expert teaching with practical, on-the-job experiences for learning that can have an immediate impact.