Apprenticeship Levy and Returnerships for over 50s

There was a lot of talk and pressure about reforming apprenticeship funding (particularly in retail and hospitality to boost recruitment and skills) before the Spring Budget. However, the Speech revealed no real movement on this issue. The apprenticeship scheme remains as is, but with a few tweaks to encourage those aged over 50 to participate in Returnerships.

This could be seen as a missed opportunity to make fundamental changes, giving employers more control and flexibility over funding training, development and future innovation exercises, which could have helped align skills with future ambitions. This is especially the case for short term practical training support, given qualifying apprenticeships are for longer periods and take people out of the day to day job for longer periods.

With regard to Returnerships, these are a “new offer promoting existing skills interventions to the over 50s, focussing on flexibility and previous experience to reduce training length.” There will be £63.2 million of investment for an additional 8,000 Skills Bootcamps in 2024-25 in England (remembering this is a devolved matter which Scotland, Wales and Northern Ireland could also address) and 40,000 new sector-based work academy programme placements across 2023-24 and 2024-25 in England and Scotland.

It may be felt that the announcement on new investment zones, alongside the already announced freeport zones, will help organisations grow across the UK (given that levelling up was the key “Everywhere” aspect of the Spring Budget) and will then support more usage of apprenticeships and available training funding. Investment zones will have access to:

enhanced rates of capital allowance
structures and buildings allowance
relief from Stamp Duty Land Tax
business rates and Employer National Insurance contributions

Alongside this, investment zones will receive flexible grant funding to support skills and incentivise apprenticeships, provide specialist business support and improve local infrastructure, dependent on local requirements.

If anything, it is important to remember that the Apprenticeship Levy is effectively a payroll tax on larger businesses. The funding available for training comes from other Government departments and it is this distinction that remains in place.

The Spring Budget announcement makes it clear that the priority is getting inactive people back to work and improving productivity, not reforming apprenticeships or training funding provisions.

Where next?

The apprenticeship and training boat was certainly not rocked by the Spring Budget or indeed made into a more attractive cruise line. It is likely, when all settles down over the next few days, people will see this as an opportunity missed to revitalise skills and training provision across all devolved nations in the UK. Some may go further and say the boat has a few holes in it and could sink if not looked at sooner rather than later…

For more details on apprenticeships, please read our content published recently during Apprenticeship Week in February 2023 which can be found here and here.