Port Skills and Safety has welcomed the government’s apprenticeship reform

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Published: Mar 25, 2024

Port Skills and Safety has welcomed the government’s pledge to invest £60 million in a move to create up to 20,000 more apprenticeships.

The announcement will help small businesses and young people by providing fully funded apprenticeships for young people up to the age of 21 from 01 April 2024 by:

  • Removing the 5% co-investment fee for small businesses employing an apprentice up to the age of 21.
  • Increasing the amount of apprenticeship levy that can be transferred to another organisation from 25% to 50%.

Announcing the new measures, Education Secretary, Gillian Keegan said: “Apprenticeships are a fantastic way for businesses to develop the skills they need, and these new measures will help more businesses and young people benefit from them.

“Our plan to deliver a high-growth, high-skilled economy is working, with more opportunities available to young people than ever before.”

“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country,” added Prime Minister, Rishi Sunak.

The apprenticeship levy was introduced in 2017 for employers with an annual pay bill of more than £3 million. Employers pay a rate of 0.5% of their annual pay bill with an allowance of £15,000.

Small employers under this threshold, currently pay a 5% co-investment to put new apprentices onto apprenticeship programmes. The same amount is paid when using apprenticeships to upskill or reskill employees. The only exemption currently in place is for small employers, with under 50 employees, having the apprenticeship fully funded by government when employing an apprentice aged 16-18.

The removal of the 5% co-investment, for small employers employing an apprentice up to the age of 21, means that more small ports will be able to employ young people without the additional cost and administrative burden. The full details are not yet clear but, with the additional planned change to the classification of small to medium-sized businesses being raised from 250 to 500 employees, PSS hopes that this will include all businesses in that range.

“This is a positive move but could go further,” said Debbie Cavaldoro, PSS CEO. “Most ports around the UK are small and medium organisations so it’s encouraging that this could help the sector to employ more young people, up to age 21, on apprenticeship programmes. It would’ve ideally been extended to include up to age 24-year-olds to take into account the importance of apprenticeships for social mobility, particularly in the coastal communities that ports serve.

“Large ports are paying huge sums into the apprenticeship levy and are not always able to maximise their return. The increase in the amount of levy that can be transferred to other organisations will help ports support their communities and supply chains, rather than it being lost to the treasury if it remains unused after two years.”

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