Andrew Steel,

IT, Website & Marketing Manager

18th March 2024

UK Government’s New Apprenticeship Reforms: What it Means for Small and Medium-Sized Businesses


Today, the government announced significant changes to apprenticeship funding, aimed at supporting small and medium-sized enterprises (SMEs) in their hiring of young apprentices. Prime Minister Rishi Sunak unveiled plans to eliminate SME co-investment payments for apprentices under the age of 22, alongside increasing the transfer limit of apprenticeship levy funds from 25% to 50%.


Effective from April 1, 2024, this strategic move is projected to inject an additional £60 million of government funding into apprenticeships, paving the way for an estimated 20,000 new apprenticeships and addressing the concerning decline in apprenticeship enrolment numbers within SMEs.


Understanding the previous 5% contribution

Under the previous framework, SMEs were burdened with a 5% co-investment requirement for apprenticeship training, while larger employers contributed to the remainder of this cost via the apprenticeship levy.

However, the low utilisation of levy funds by SMEs highlighted a critical gap in the system. To alleviate financial barriers and stimulate apprenticeship uptake, the government has opted to fully fund apprenticeships for individuals up to the age of 21, streamlining the process for SMEs and expanding opportunities for young talent.


I run an SME, what does this mean for me?

If you run an SME, this change means that you will no longer be required to contribute 5% towards the cost of apprenticeship training for apprentices under the age of 22.

In some cases, the 5% contribution can be upwards of £700 (Our CR&S Practitioner Course) Which can be a barrier when enrolling a new starter or choosing to upskill a member of your team. With the government covering the full cost of training, you can invest your resources elsewhere in your business or offer additional support to the individual’s needs whilst they complete their training.


Understanding the rise in the transfer limit to 50%

Furthermore, the decision to raise the transfer limit to 50% encourages collaboration and resource sharing among local businesses of varying sizes. By empowering larger enterprises to support SMEs in apprentice recruitment, these reforms aim to mitigate costs, facilitate access to skilled workers, and drive economic growth.


What does this mean for me?

For larger businesses in the UK grappling with underutilised apprenticeship levy funds, this adjustment provides a solution. They can now redirect additional surplus funds to smaller businesses that don’t pay the levy. This ensures that these resources are effectively used to support apprenticeships for individuals who stand to benefit.

This newfound flexibility not only optimises fund allocation but also promotes collaboration between large and small enterprises, enhancing the overall impact of apprenticeship initiatives throughout the country.


For further insights and guidance on maximising your apprenticeship funding, please don’t hesitate to reach out to us at:


Tel: 023 8017 0380



Kiwi & Yuzu Ltd is committed to empowering businesses and individuals through quality education, training, and skills development.



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