Autumn Budget 2018

After strong lobbying by AELP, the chancellor’s autumn budget on 29 October contained a welcome announcement that the employer co-investment rate for taking on apprentice is being halved to 5%. Confirmation of the date of implementation for this measure will follow in due course.

In response, AELP CEO Mark Dawe said,

““This is a major and positive shift which AELP has been pushing hard for since before the levy was introduced and it should enable providers to work with smaller businesses to start getting back to offering apprenticeships to young people and local communities. We are grateful to Anne Milton, Robert Halfon and Gordon Marsden for their significant efforts in making this happen“.

Below are the relevant extracts from the Treasury’s red book on the Budget skills announcements:

4.48 Apprenticeships – The government will introduce a package of reforms to strengthen the role of employers in the apprenticeship programme, so they can develop the skills they need to succeed. As part of this:

•  the government will make up to £450 million available to enable levy paying employers to transfer up to 25% of their funds to pay for apprenticeship training in their supply chains
• the government will provide up to £240 million, to halve the co-investment rate for apprenticeship training to 5%
• the government will also provide up to £5 million to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, to identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers. All new apprentices will start on these new, higher-quality courses from September 2020
• the Exchequer Secretary to the Treasury and the Minister for Apprenticeships and Skills will work with a range of employers and providers to consider how they are responding to the apprenticeship levy across different sectors and regions in England, as well as the future strengthened role of apprenticeships in the post-2020 skills landscape.

4.49 National Retraining Scheme – The government will work with employers to give workers the opportunity to upskill or retrain. The Budget allocates £100 million for the first phase of the National Retraining Scheme (NRS). This will include a new careers guidance service with expert advice to help people identify work opportunities in their area, and state-of-the-art courses combining online learning with traditional classroom teaching to develop key transferable skills. The National Retraining Partnership between the government, the Confederation of British Industry and the Trades Union Congress will focus on job-specific retraining in phase two.

4.50 Skills pilots – The government will fund £20 million of skills pilots. This will include:

• a new £3 million pilot to help employers in Greater Manchester and surrounding areas to address local digital skills gaps through short training courses
• a £10 million pilot in Greater Manchester, working with the Federation of Small Businesses, to test what forms of government support are most effective in increasing training levels for the self-employed
• £7 million match funding alongside employers to provide on-the-job training to young people not currently in employment, education or training in Greater Manchester, and to move them into sustainable career paths with employers.

The Autumn Budget 2018 documents are available at: https://www.gov.uk/government/publications/budget-2018-documents