Hammond said the changes would allow firms more flexibility over how the levy is spent ©PA Images
Hammond said the changes would allow firms more flexibility over how the levy is spent ©PA Images

Firms allowed to spend apprenticeship levy on supply chain

The government has announced changes to its apprenticeship levy that will allow firms to spend a portion of their funds on their supply chain.

The package of changes, announced by the chancellor Philip Hammond in his party conference speech today, will allow employers to invest a quarter of their apprenticeship fund on people working for suppliers.

The government hopes this will increase the number of people able to benefit from apprenticeship training.

Hammond said: “We have heard the concerns about how the apprenticeship levy is working so today we’ve set out a series of measures to allow firms more flexibility in how the levy is spent.

“We know that we may need to do more to ensure that the levy supports the development of the skilled workforce our economy needs. So in addition to these new flexibilities we will engage with business on our plans for the long-term operation of the levy.”

The government has also announced another £90m of funding to go into its apprenticeship levy scheme.

Since April 2017 employers with a pay bill of more than £3m a year have been required to pay into the government’s apprenticeship levy scheme. Contributing employers can then use funds from their account to pay for apprentices or training providers.

Staying on the theme of skills, Hammond used the speech to announce £100m funding for an adult retraining skills and £20m to help businesses develop management skills.

Also announced was an independent review into the water, telecoms and energy regulators – to be carried out by the National Infrastructure Commission – and a potential new tax on digital services.

Hammond used his party conference speech to defend prime minister Theresa May’s Chequers Brexit plan, which he said “safeguards British jobs and British businesses”. He also attempted to repair damage Brexit has done to the party’s relationship with business.

“We need to have the courage now to regenerate capitalism once again, to pass on something worthwhile to the next generation,” he said. “That’s what being a Conservative is all about.” He added that the Conservative Party “is and always will be the party of business”.

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