The director of a global training provider has urged businesses to “use it or lose it” as Government reforms taking effect this year mean many firms could miss out on huge sums of apprenticeships funding.
Jordan Burke, co-founder of Derby-based Nine Dots Development which delivers apprenticeship training to big name firms across the UK, said many businesses were not aware of the looming changes which have forced new urgency on prompt spending of the Growth and Skills Levy.
New Government rules halving the Levy spending timeframe from two years to one mean many may miss out on large sums of training money which will go back to the Treasury if not spent.
Jordan said: “It is very clear that the profound implications of new Government rules around the Growth and Skills Levy, formerly the Apprenticeships Levy, have not been fully understood by many companies across the UK.
“Reforms coming into effect this year mean businesses should really focus on spending the money that they have paid into the funds and get apprentices trained up as soon as possible. If they don’t, millions will be returned to the Treasury and they will miss out on potentially valuable training opportunities. Not just that, young people who would really benefit from apprenticeship training will miss their chance too. That seems a huge shame when so much has been done to boost the value and opportunities provided by apprenticeships in the UK.”
The Growth and Skills Levy is a funding pot paid into by all companies with a wage bill of £3million or more.
The money goes into a central location which companies are able to access to fund apprenticeships for staff, in a skills drive introduced by the Government in 2017.
Under previous rules companies had up to two years to spend their Levy funds before they were repaid to the Government.
But the new regulations have slashed that time period which means that firms now have only 12 months to spend the cash.
The Government’s move comes after many UK firms were slow to spend their Levy funds or did not access the cash at all, with over £3.3billion in unspent money being returned to the Treasury between 2019 and 2022.
The slashing of the time period for accessing funds is not the only change introduced in the new reforms.
The Government is also reducing the mandatory time period for apprenticeships to get people trained more quickly and efficiently. There is also a boost for smaller companies who will now have 100 per cent of their apprenticeship training costs paid for, up from 95 per cent under previous rules.
Jordan said: “At Nine Dots Development we have trained thousands of apprentices over the years. It’s clear to see what great benefits they are giving young people who gain such a lot of confidence and skills through the scheme.
“My hope is these changes being introduced by the Government are a wake-up call to big businesses which have been paying huge amounts over the years into the Levy and not spending the funds. By reducing the timeframe for spending the money I hope large companies are given a bit of a sharp reminder that the funding is there for apprenticeships and they should spend it. Otherwise it will be a huge wasted opportunity both for business and the next generation of talent.”
National Apprenticeship Week running from February 9-15 shines a light on the positive impact that apprenticeships make to individuals, businesses and the wider economy.
This story was written and shared on behalf of Nine Dots Development by Lucy Stephens. Can we share your news and get you in the headlines too? Find out how we can help by getting in touch.
