England’s apprenticeship funding rules changed on 1 August, and there’s quite a lot in the detail that will matter to employers.Levy funds will now expire after 12 months rather than 24. The government top-up on new levy contributions has been removed, and employers that use up their levy funds will now contribute 25% towards additional training costs, compared with the previous 5%. Whereas, smaller employers with a payroll below £3 million will not have to contribute towards apprenticeship training for under-25s.
The thinking behind the changes is fairly straightforward where the government wants more young people starting apprenticeships, employers to make better use of the levy funding available to them, and costs to be less of a barrier for smaller businesses.Those are all sensible objectives but the bigger question is what happens when they meet the reality of running a business.
Take a small employer that has never hired an apprentice before. Removing the training cost certainly helps, but it doesn’t necessarily make the decision an easy one. They may still be asking which apprenticeship is right for the role, how the role should be structured, what they will need to provide as an employer, how the funding actually works and who they need to speak to first. None of those questions disappear because the funding becomes more generous.
In many cases, the barrier isn’t simply whether an employer can afford an apprentice. It is whether they have the time and confidence to work through the process, understand their options and feel that they are making the right decision. That is particularly relevant for smaller businesses. When you’re already dealing with recruitment, customers, staffing and the day-to-day running of the business, working out how to navigate another set of funding rules can easily fall down the list of priorities. This is where we think training providers have an important role to play.
The relationship with an employer shouldn’t start and end with delivering the apprenticeship. Providers can help employers identify where an apprentice could add value, understand the funding available, choose the right standard and turn an initial idea into a role that works for both the business and the learner. To do that well, providers need to understand more than the training itself. They need a good grasp of the funding system, the pressures employers are facing and the wider labour market, and be able to bring those things together in a practical way.
That will also be important when we come to judge whether these changes have actually worked. If apprenticeship starts to increase, we need to look beyond the headline figure and ask where that growth is coming from. If apprenticeship starts to increase, how much of that represents genuinely new opportunities and how much simply brings forward decisions employers would have made anyway?The number of starts matters, but it doesn’t tell us what is driving that growth.
The more useful measure will be whether these reforms lead to better apprenticeship decisions, not simply more of them. Over the next 12 to 24 months, it will be worth watching whether more employers get involved, particularly those with little or no previous experience
of apprenticeships, and whether that increased participation translates into stronger completion rates and progression into sustained employment.
Funding can remove the cost barrier, but it doesn’t guarantee the right apprenticeship decision. For us, that is where the success of these reforms will ultimately be measured: not just by how many apprenticeships start, but by whether more employers are able to make well-informed choices about when and how an apprenticeship can genuinely work for their business.
