Government proposals to overhaul the controversial apprenticeship levy 18 months after the scheme was rolled out have been labelled “piecemeal and reactive” by a leading industry figure.

Announcing the reforms at the Conservatives’ annual party conference in Birmingham yesterday Chancellor of the Exchequer Philip Hammond said the proposed changes would give companies more flexibility.

An extra £90m of government funding will enable employers who pay the levy – those with an annual wage bill of at least £3m – to spend a quarter of their apprenticeship funds on people working for businesses in their supply chain, while the Institute for Apprenticeships would receive an additional £5m to introduce new standards and update existing ones so that more courses can be offered.