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Royal Mail has doubled the amount of its apprenticeship levy that it shares with small and medium-sized businesses to £2 million a year, after its initial fund was oversubscribed in just three months.
About 140 businesses across a number of sectors, including ecommerce, manufacturing and engineering, have already accessed the funds to support the training of apprentices.
“After an overwhelming response to our first £1 million round of apprenticeship funding, we’re proud to double our commitment and help even more businesses,” Paula Stannett, chief people officer at Royal Mail, said. “With apprenticeship courses available for a wider range of subjects, they are an excellent way for companies to upskill their workforce.”
The announcement came as Sir Keir Starmer scrapped Labour’s target to get 50 per cent of young people into higher education. Speaking at the Labour Party conference on Tuesday, the prime minister said the government would replace it with a new ambition for two thirds of children to go to university, or take on a “gold standard” apprenticeship.
Companies can apply to use Royal Mail funding for any government-approved apprenticeship course, such as digital marketing, ecommerce, AI or finance. Royal Mail is targeting businesses that sell online and have up to 250 employees.
One of the recipients of the funding is Peerless Plastics & Coatings, a Norfolk-based manufacturer of bespoke hard coatings to plastic products for nearly any industry.
Peter Llewellyn-Stamp, its managing director, said that his company of about 50 employees did not lend itself to a traditional apprenticeship route due to the unique skills needed for the job.
However, he said getting access to the levy gifting was a “straightforward” and well-supported process that has allowed the company to employ two apprentices this year.
• Apprenticeships prove their worth in bottom line
The apprenticeship levy is a tax on employers with an annual pay bill of more than £3 million and was introduced in 2017 to increase the number of apprenticeships. In April this year the government started reforming it into the growth and skills levy, designed to offer employers greater options beyond traditional apprenticeships. The levy is set at 0.5 per cent of the employer’s pay bill and is collected monthly through payroll taxes.
It gives big businesses the option to transfer any unused training budget to fund roles at smaller firms, instead of losing it to HM Treasury. This money can be used to cover the costs of training and assessment for employees.
Some large employers have combined their unspent levy into single pots. This year Aldi pledged to give £2 million to small and medium-sized businesses over the next two years. In April companies including the BBC and Amazon as well as Liverpool FC joined a £9 million scheme that has funded more than 1,500 apprentices in the Liverpool area.
Applications for the fund are now open on Royal Mail’s small business hub. To secure a levy transfer, employers need to have an apprenticeship service account, which can be set up on the main government website.
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