The door to giving greater flexibility for employers to help close skills gaps has been opened with the latest update to the Apprenticeship Funding Reforms.

Employers who pay the Apprenticeship Levy now have the option to transfer 10 per cent of their annual apprenticeship funds to other organisations.

This change is seen by many as a response to companies calling for greater flexibility in the administration of the Apprenticeship Levy, brought in by the government just a year ago.

Damian Burdin, Chief Executive at Progress to Excellence Ltd, said:

“The change means that large organisations with unspent levy funding will be able to support smaller employers in their supply chain to recruit new apprentices or train existing staff via an apprenticeship.

“A report published earlier this year by the Chartered Institute of Personnel and Development (CIPD) shows that more than half of employers who pay the levy want a more flexibility. 

“This change may be as a result of this call by businesses and will hopefully enhance employer ownership over their levy funds.”

This latest change will apply to those employers with an annual wage bill of more than £3 million who pay the Apprenticeship Levy.

In its guidance to transferring apprenticeship service funds, the government says any employer registered on its apprenticeship service is eligible to receive and use these transferred funds. The money can only be used to pay for the training and assessment cost of the apprenticeships agreed with the receiving employer. However, there are no restrictions as to whom employers can transfer the funding. 

Up to 10 per cent of levy funds can be transferred, calculated from the total of the employer’s declared levy value and the government’s 10 per cent top-up.

Damian Burdin added: “Apprenticeships are an incredibly valuable and cost effective way of employers bringing in new talent to their business or upskilling their existing workforce. 

“This update to the Apprentice Funding Reforms will enable businesses to close skills gaps and can therefore only be seen as a positive move. Allowing smaller organisations to draw on these financial resources should only increase the number of apprenticeship opportunities available and give employers a greater incentive to see the value of taking on apprentices - not only for themselves and their growth but also for the greater good of the economy.”

Employers who need to find out more about the apprenticeship levy and the new funding reforms can This email address is being protected from spambots. You need JavaScript enabled to view it. the Progress to Excellence Ltd team or call on 0151 650 6933.

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