Small businesses will receive remnants left over from the apprenticeship levy once larger firms have made use of the funds, Skills Minister Nick Boles has confirmed.
The Government had previously published a document putting forward plans to make apprenticeship levy funds ‘more widely available’ if levy-paying employers do not make use of all of their reserves.
From 2017, the new apprenticeship levy will be introduced at a rate of 0.5% of an employer’s pay bill. Each employer will also receive an allowance of £15,000 to offset against their levy payment.
Speaking in front of MPs, Mr Boles said: ‘While it will be possible for any employer who pays the levy to use their contribution on their own apprenticeship across the economy we don’t expect all employers to use all their money.
‘The levy money that is not used by those employers who have paid it will then effectively be recycled to support the apprenticeships of those employers who don’t pay the levy.’
He also revealed that the new Institute for Apprenticeships will play a ‘very important role’ as the ‘guarantor of quality in the apprenticeship system’, adding that the institute’s board would consist of ‘mainly business leaders’.
It is estimated that the new apprenticeship levy will raise a total of £3 billion a year.