Small businesses will have the majority of their apprenticeship training costs covered as part of the government’s plan to increase the number of apprenticeships.

Businesses with a pay bill of over £3 million will pay an apprenticeship levy of 0.5% of their annual pay bill from April 2017. Each company will have a £15,000 annual levy allowance.

The government has announced:

• Businesses too small to pay the levy (around 98% of employers) will have 90% of their training costs paid by the government
• Additional support of £2,000 per trainee will be available for businesses that take on apprentices that are aged 16 -18 or young care leavers
• Businesses with 50 or fewer employees will have 100% of their training costs paid for if they take on these apprentices.

The final details will be confirmed in the autumn.

Carolyn Fairbairn, director general of the Confederation of British Industry, said:

“The levy is too narrowly defined. It covers only 1 type of training and employers can only reclaim off-the-job costs, As a result, valuable forms of training risk being cut back, with quantity put ahead of quality.”

Mike Spicer, director of research at the British Chamber of Commerce, said:

“It is disappointing […] that businesses will have to wait until October, just 6 months before the proposed implementation date of the levy, for details of the technical rules. Indeed, the timescale seems very compressed for a complex policy that relies on a major IT set-up.”