Apprenticeships are an economical way to train staff in a range of business-specific skills. Small and medium-sized businesses (SMEs) are eligible to benefit from a range of generous grants and subsidies to support their commitment to training. In fact, the government has allocated over £650 million to support apprenticeships within SMEs for the period January 2018 - March 2019. However, there is concern that too few businesses are investing in apprenticeships. Read on to find out how small businesses can access funding to do so, and what are the benefits.

How apprenticeship funding works

Apprenticeships are training programmes that combine taught learning with knowledge and skills acquired in the workplace. Available in a vast range of professions and a variety of levels, they result in nationally-recognised, industry-respected qualifications. Grants of up to 100% are accessible to small businesses seeking to upskill new or existing staff with apprenticeship qualifications.

How a business pays for apprenticeship training varies depending on its size. Businesses with an annual payroll over £3 million now pay the Apprenticeship Levy. Organisations that don’t fall into that category pay at most 10% of the cost of apprenticeship training, with the lion’s share paid by the government according to its co-investment scheme.

To put this in context, a Level 3 or Level 4 accountancy apprenticeship, which results in an industry-recognised accounting qualification, usually costs £9000. Under the co-investment scheme, a SME would pay £900 per apprentice.

There are other ways to obtain accountancy qualifications, for example by taking a Level 3 or Level 4 Accountancy Diploma. These are not eligible for government co-funding and cost approximately £2700 per person.

In some circumstances, government funding covers all apprenticeship training costs. 100% funding is available to the small employer if:

• The apprentice is 19-24 years old and a care leaver or EHC plan holder.
• The firm has fewer than 50 employees
• The apprentice is 16-18 years old.

Further savings can be made by employers of apprentices under 25 years of age who pay the standard rate of tax, in the form of employer NI exemption.

Larger businesses can now transfer their unspent funds to SMEs

Recent changes to the apprenticeship levy scheme mean that SMEs can now inherit unspent apprenticeship funding from larger businesses to invest in training their own staff. Under the transfer scheme, levy payers can choose to pass on up to 10% of any unspent funds to another organisation.

Businesses may choose to donate to an employer in their supply chain, to a recipient in their industry or sector, or an unrelated smaller business or charity organisation. With up to 90% of levy funds still unspent, many SMEs could thus gain fully-funded staff training.

Funds must sufficiently cover the training costs but employers who receive transfer funding do not have to pay their own 10% contribution.

How apprenticeships particularly benefit smaller businesses

With the newly relaunched apprenticeship programmes, SMEs are now able to access the same high-quality apprenticeship training as larger organisations to upskill staff in key business skills. The employer who offers work-based training becomes a more attractive proposition to ambitious job seekers. The SME employer who makes training part of their package can more effectively level the recruitment playing field with larger recruiters.

Using apprenticeships to upskill existing staff

Apprenticeships are a convenient way to upskill existing staff, as an organisation’s existing staff are equally eligible to undertake apprenticeship training programme as its new-hires. Apprenticeship training can legitimately be utilised to refresh the skills of returners, to update the skills of older works and to reskill those coming into a business from other industries.

Employers can make a long-term career under their roof more attractive to existing employees who might otherwise be tempted to look elsewhere for advancement.

Where to get help and advice

In order to access government funding, apprenticeship training must be carried out by an approved provider. Solvo Vir is a national training provider, approved by the Education and Skills Funding Agency to work with business wishing to claim apprenticeship funding. With twenty years’ experience in the sector, Lyn Bolton is the firm’s Head of Operations. Lyn says:

“We find that SMEs who haven’t offered their staff apprenticeship training in the past can be put off by the funding process. However, the benefits far outweigh the complexity.”

A registered training provider such as Solvo Vir will work closely with small businesses to organise funding before commencing on staff training programmes.

For a free consultation or to find out more about apprenticeship funded training courses, call Solvo Vir on 0330 0539140 or email info@solvovir.co.uk

www.solvovir.co.uk