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Apprenticeship Levy allows funds transfer to supply chain partners

11 July 2018

Large firms that pay the Apprenticeship Levy will be able to transfer 10% of their contributions to their supply chain partners, following changes made to the scheme.

Announced by Apprenticeships and Skills minister Anne Milton, it changes the previous rule that stated funds could only be shared with one other employer.

The move has been welcomed by industry bodies, one of which is the Building Engineering Services Association (BESA), which has campaigned for the move since the levy was introduced last year.

Welcoming the announcement, director of training Tony Howard said the new arrangement was originally scheduled for last April.

"Sharing the funding in this way will allow many more SMEs to invest in apprentices," he said.

Just 2% of employers pay the levy - those with annual payrolls of £3m or more - but there has been considerable frustration expressed over complications and difficulties in accessing funding.

Designed to increase the number of apprenticeships, numbers have fallen since the scheme was introduced.

Mr Howard said it "was no surprise" that the levy had caused confusion.

"The principal behind the levy is sound, but small employers were struggling to access funds for specialist training provision - as opposed to the mainstream plumbing and electrical provision that was being offered to them by the further education sector.

"All the large companies were not using the full amount they paid in," he continued.

The new arrangement now provides large companies with the option of sharing funds with supply chain partners and Mr Howard said this would help to raise apprenticeship numbers in the future.

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