Apprenticeship cap lifted for small businesses

A cap on the number of apprentices small businesses can take on has been scrapped by the Department for Education.

From 3 April, small employers who do not pay the apprenticeship levy will no longer be limited to a maximum of ten new apprenticeship starts.

The news has been welcomed by the hospitality industry, which not only relies on apprenticeship programmes to recruit and train employees, but also has one of the highest proportion of small to medium sized businesses of any industry, making up almost 70% of the sector.

Sara Roberts, managing director of Umbrella Training, an organisation that develops hospitality apprenticeship programmes, said: “We are pleased that the cap is being abolished by the government from today.

“Given the challenging economic backdrop, such moves will only help enhance operations within our sector and create another funnel that can be utilised to help train and upskill teams.”

Roberts added: “As a direct result of this move, we do expect to see more apprenticeships being offered within the sector.”

The move to scrap the cap was set out by skills minister Robert Halfon in a letter published at the end of March. Halfon wrote: “We recognise the important role smaller employers play in creating apprenticeship opportunities, particularly for younger people and those in disadvantaged areas, and we want to ensure smaller employers have the access to the apprenticeships they need to meet their ambitions, fill their skills gaps and grow their business.”

He added: “They will be able to recruit as many high-quality apprentices as the business needs.”

The cap was introduced in January 2020 which set the limit to three new apprenticeship starts. The cap was lifted to ten by summer 2020.

Small businesses that do not pay the apprenticeship levy receive 95% of training costs from the apprenticeship budget, funded by levy paying businesses.

The cap was introduced to prevent the apprentice budget from being overspent.