UK Prime Minister Rishi Sunak will pledge to create up to 20,000 more apprenticeships with plans to fully fund training for young people and cut red tape for small businesses.

The prime minister will set out a package of reforms he said "will unlock a tidal wave of opportunity".

The government will fully fund apprenticeships in small businesses from 1 April by paying the full cost of training for anyone up to the age of 21, reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.

This aims to remove the need for small employers to meet some of the cost of training and saves time and costs for providers like further education colleges who currently need to source funding separately from the government and businesses. 

The move is underpinned by an additional £60 million of new government funding for next year.

From the start of April, the government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses. Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer.

Business groups have long called for reforms to the levy, paid by large firms with the aim of creating more apprenticeship places, with millions of pounds said to be going unspent and returned to the treasury every year.

The change means that from April 6, businesses can share up to 50% of unspent funds, up from the 25% they are currently able to transfer to another employer.

Combined, the government expects these policies to enable up to 20,000 more apprenticeships.

Sunak said, “Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.”

Education Secretary, Gillian Keegan said, “Apprenticeships are a fantastic way for businesses to develop the skills they need, and these new measures will help more businesses and young people benefit from them. Our plan to deliver a high-growth, high-skilled economy is working, with more opportunities available to young people than ever before.”

Sunak will also announce a 50% uplift to the thresholds that determine a company's size, in a move he hopes will make 132,000 more businesses qualify as small and medium-sized enterprises (SMEs) and avoid non-financial reporting requirements.

Alongside measures to streamline reporting requirements, the reform, expected to come into effect in the autumn, could to save thousands of UK SMEs around £150 million per year, according to the government.

Secretary of State for Business and Trade Kemi Badenoch said, “Almost every job in the UK is owed to what is, or what previously was, an SME. They are the engines of economic growth for this country.”

“Whether it’s through cutting red tape, unlocking investment or lowering business costs, today’s announcements show that this government is committed to doing all it can to turbo-charge SMEs so that they can go further and faster than ever before,” Badenoch said.