Government announces apprenticeship levy reforms

Chancellor Philip Hammond has announced a package of new measures to reform the under-fire apprenticeship levy.

Under the new rules, employers who pay the apprenticeship levy will be able to transfer a quarter of their funds to organisations in their supply chain, including smaller employers.

Levy-paying businesses have been able to transfer up to 10% of their training funds to other employers in their supply chain since April 2018, but the new measures will increase this to 25%.

The reforms also include £5 million of extra funding for the Institute for Apprenticeships, to improve training standards and update existing ones.

Additionally, the Government has announced that in the coming weeks, it will begin a review of how the levy will operate after 2020.

Adam Marshall, director-general of the British Chambers of Commerce (BCC), called the measures "an important step in the right direction", but said the government should look to introduce greater flexibility in the future.

The BCC's recommendations include allowing levy-paying businesses to transfer 50% of their training funds to businesses in their supply chain, and ending the 10% co-investment currently required from smaller firms.

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