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Government Fully Funds Apprenticeship Training for 16–21-Year-Olds in SMEs


Jade Gillham


30th April 2024


Recently announced reforms are set to revolutionise apprenticeship funding for small and medium-sized enterprises (SMEs), ushering in a new era of opportunity for both businesses and young talent. Here’s all you need to know about the upcoming changes.

What’s Changing?

In a speech on the 18th March 2024 at the Business Connect conference, Rishi Sunak announced several changes set to come into effect this year designed to support SMEs. The Government is hoping that the reforms will create up to 20,000 more apprenticeships. 

The key changes announced include:

  • The Government will fully fund apprenticeships in non-levy paying small and medium-sized businesses (SMEs) from 1 April 2024, by paying the full cost of training for anyone up to the age of 21
  • From 1 April 2024, the Government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses
  • The Government is investing £60m to ensure that, where there is demand for apprenticeships from businesses, there is enough funding to deliver them
  • The Government plans to raise the threshold that defines a small-to-medium enterprise (SME) from 250 employees to 500 employees.

Changes to Apprenticeship Funding for SME (Non-levy Paying) Businesses

The Government will fully fund apprenticeships in non-levy paying SMEs from 1 April 2024 by paying the full cost of training for anyone up to the age of 21. It’s hoped that by removing the need for SME businesses to meet the costs of training, it will create more opportunities for young people.

For new starts from 1 April 2024, for employers who do not pay the levy, the government will fully fund apprenticeship training costs, up to the funding band maximum for apprentices who at the start of their apprenticeship training are aged between:

  • 16 and 21 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
  • 22 and 24 years old and: – has either an education, health and care (EHC) plan provided by their local authority and / or has been in the care of their local authority; and – their employer has fewer than 50 employees

Levy Transfers Increased to 50%

Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer but businesses have long called for reforms as millions of pounds are unspent and returned to the Treasury every year.

Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including SMEs, to take on apprentices. 

This will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people.

Thinking of Hiring an Apprentice or Wanting to Upskill Existing Staff?

There has never been a better time to hire an apprentice or use apprenticeships to develop new knowledge, skills and behaviours in existing staff. Take a look at our Apprenticeship Guide to learn about our Apprenticeship programmes.

If you own or work at a small business and want to learn more about hiring an apprentice, contact wbl@ucq.ac.uk or call Sam Easson on 07383823492 or Chris McCormick on 07383 836 747.