How the Autumn 2024 Budget Will Affect You

The UK government's Autumn Budget 2024, presented by Chancellor Rachel Reeves on 30th October 2024 , introduces several measures that effect both the learners and employers we partner with. 

Aimed at addressing the nation's skills gap. These initiatives focus on expanding opportunities for young people and supporting businesses in developing a skilled workforce.

Key Highlights Benefiting Apprenticeships

1. Introduction of the Growth and Skills Levy
   Replacing the existing apprenticeship levy, the new Growth and Skills Levy will offer greater flexibility in how funds are used. It is anticipated that in some sectors more focused apprenticeships, allowing for quicker training that meets employer needs will be developed. This will enable employers to address important skill gaps, such as those in management capabilities, with further details due in the near future.  
2. £40 Million Investment in Foundation and Shorter Apprenticeships
   The government has committed £40 million to developing shorter, foundation-level apprenticeships. This funding is meant to open up more entry-level opportunities across industries, aligning training programmes with current job market needs and helping young people get started in their careers.
3. Additional £300 Million for Further Education
   An extra £300 million is being invested in the further education sector. This funding is expected to enhance resources, infrastructure and quality, supporting the growth and effectiveness of apprenticeship programmes nationwide.
4. Establishment of Skills England
   Skills England is a newly formed organisation designed to tackle nationwide skills shortages. The Education Skills Funding Agency (ESFA) will now become part of the Department of Education (DfE) to ensure greater continuity and greater scope for apprenticeships to gain equal footing with university courses.

By working with businesses, educational institutions, and training providers, Skills England will help ensure that apprenticeship programmes align with industry demands, both now and in the future.

1. Support for Small and Medium-Sized Enterprises (SMEs)
   SMEs play a crucial role in the economy, and the government is now allowing companies to transfer up to 50% of their apprenticeship levy funds to other businesses, up from the previous 25%. This increase encourages businesses to share resources and collaborate, which will help create more apprenticeship opportunities.
2. Employer National Insurance Benefits for Apprentices Under 25
   Another key incentive for businesses is the continuation of National Insurance (NI) relief for apprentices under the age of 25. Employers do not have to pay NI contributions for apprentices under 25, which makes it more affordable for companies to hire and train young people. With the Budget's increase in NI rates, this relief remains a valuable cost-saving for businesses taking on apprentices, helping to offset expenses and encouraging more employers to invest in training.
3. Increase in Apprenticeship Minimum Wage: Effective from April 2024, the minimum hourly wage for apprentices will rise from £5.28 to £6.40, marking a 21% increase. This significant boost aims to make apprenticeships more financially viable for young people, helping them manage living costs while they gain valuable skills and experience. Employers will benefit as this increase will result in making Apprenticeships an attractive proposition to talented, young people seeking to launch their career.

These Budget measures collectively aim to make the apprenticeship system more flexible, accessible, and responsive. With new funding, reduced National Insurance costs for apprenticeships, and initiatives like Skills England, the government is working to build a workforce that meets the demands of today’s economy and addressing the skills gap by supporting businesses, especially SMEs, in developing young talent. This commitment is intended to drive sustainable economic growth and provide young people with meaningful career opportunities.