Rachel Reeves’ Budget boosts apprenticeship funding but 200 South Devon young people still await placements

South Devon College is hoping the recent change to apprenticeship funding announced in the budget will be a boost for the local area.

The college has issued an urgent call to employers across South Devon and Torbay with its 100 Apprenticeships in 100 Days campaign.

It says it has more than 200 young people currently waiting to start an apprenticeship, but not enough local businesses are stepping forward to take them on.

The Budget introduced significant reforms to apprenticeships, including fully funded training for under 25’s in small and medium sized enterprises and changes to the apprenticeship levy, impacting how employers plan and invest in workforce training.

“This means that training for under-25-year-old apprentices, in small and medium sized enterprises will now be fully government funded,” said South Devon College, CEO and Principal, Laurence Frewin. “This is great news for local businesses as it will make it easier for them to recruit and train young local talent.”

The college says the region is facing a growing disconnect between the number of young people keen to work and the number of employers willing to hire them. It’s believed a combination of economic uncertainty, misinformation and rising business costs is contributing to the issue. 

One of the biggest obstacles for employers, the College says, is confusion about costs.

Many mistakenly believe hiring an apprentice is expensive. In fact, most employers pay no National Insurance for apprentices aged under 25, and financial incentives of up to £1,000 are available, with further incentives for foundation apprenticeships.

Apprentices in their first year of study must be paid at least £7.55 per hour currently. This will increase to £8 per hour from April 2026. After the first 12 months, they must be paid at least the relevant national minimum wage for their age bracket. 

“There is a lot of conflicting information about the costs of hiring an apprentice, especially on social media,” says Laurence Frewin. “I would urge any employer considering hiring an apprentice, or unsure about the financial side, to contact the South Devon College apprenticeship team for clear guidance.”

Mr Frewin went on to say that hiring an apprentice has many benefits for employers.

“It introduces fresh talent and ideas to the business by recruiting new staff and upskilling current staff and can help boost staff loyalty and motivation.

“Studies show that because of apprenticeships 80 per cent of employers report higher staff retention and 92 per cent of employers see a boost in workforce motivation and satisfaction.”

The St Martin’s Group study on the benefits of apprenticeships found that despite associated costs, UK employers see an average annual gain of £2,500 to £18,000 in output per apprentice during their training period. 

Employers who would like accurate information about apprenticeships can contact: employers@southdevon.ac.uk or visit  100 Apprenticeships in 100 Days - South Devon College