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Unspent apprenticeship levy funding to be transferred down supply chain

SMEs will be able to access larger contractors’ unspent apprenticeship funding, following changes to the government’s apprenticeship levy.

Contractors will be able to digitally transfer their unspent apprenticeship funds to other supply chain members from the spring of 2018.

This means that SMEs, which train two-thirds of all construction apprentices, can spend larger contractors’ excess apprenticeship funds that are not needed.

The government will provide all firms with digital vouchers to spend on training providers.

This system will be developed by a new employer group including the CBI, Federation of Small Businesses, EEF - The Manufacturers’ Organisation, and the British Chambers of Commerce.

The Department for Education unveiled details for its new apprenticeship levy in August.

Federation of Master Builders chief executive Brian Berry said flexibility in the funding model was “critical” to the success of the apprenticeship levy.

He said: “As long as larger contractors are unable, or unwilling, to play a greater role in industry training, then it’s vital that funds can be rerouted to smaller firms.

“The severity of our industry’s skills shortage means we need to ensure every single penny of apprenticeship levy that is extracted from the construction sector is reinvested in high-quality construction apprenticeships.”

Mr Berry added that the trade association had concerns the money would be “left languishing in the general pot” before being released to other sectors.

However, he said the issue now was to ensure the digital voucher model is easy for small firms to use.

Two further funding policies have also been confirmed by the government.

An additional 20 per cent in funding will be given to training providers to train apprentices aged 16-18, which CITB director of policy Steve Radley said responded in part to the industry’s concerns on the affordability of training apprentices.

In August, the CITB had warned that the government’s new levy would cut funding for apprenticeships by up to 30 per cent due to the introduction of new standards, which have yet to be confirmed for the construction industry.

This means construction training providers will be forced to use the existing apprenticeship framework, which will be subject to a 30 per cent funding cut from April 2017.

Mr Radley said: “The funding offer has been improved and transition periods have been introduced, which offer the industry breathing space. The priority now must be to get the new standards agreed as quickly as possible, so that employers can use them and access the higher funding rates they carry.”

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