But sector calls for more nuance on skills and transparency on spending
The UK government has announced reforms to help small businesses take on more apprentices, aiming to open 20,000 placements, mostly for younger people.
From 1 April, the government will cover apprentice training costs in small businesses for anyone up to the age of 21. It will be funded from £60 million of new government funding announced on 18 March.
At the same time, the amount of funding that large employers paying the apprenticeship levy can pass on to other businesses will increase from 25 per cent of their unused levy to 50 per cent.
The government said that as of December 2023, there were 530 employers who had pledged to transfer more than £35.39m to support apprenticeships since September 2021.
‘A tidal wave of opportunity’
Speaking at the Business Connect conference in Warwickshire, prime minister Rishi Sunak said the measures would “unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country”.
Education secretary Gillian Keegan said apprenticeships were now available in around 70 per cent of all occupations.
“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,” she said.
Responding to the announcement, Beatrice Barleon, head of policy and public affairs at the charity Engineering UK, welcomed in particular the support for SMEs and focus on younger people.
But she added that “while these measures are certainly a step in the right direction, more still needs to be done to ensure our apprenticeships system is a success”.
“It’s clear there is still an apparent, and growing, mismatch between levy intake and the apprenticeship budget,” she said.
“In light of apprenticeship numbers needing to grow to meet demand in the engineering and technology sector, we would like to see greater transparency as to how this additional money is currently being spent.”
‘A positive signal’
Meanwhile, the National Centre for Universities and Business called the announcement “a positive signal of continued support for a co-delivery education model across universities and businesses”.
NCUB said that numbers progressing through the apprenticeship route, particularly in higher and degree programmes, “continue to soar, showing how impactful and valued direct engagement with employers is within learning”.
But they added that the apprenticeship levy “continues to be too inflexible, and this is a huge barrier to further growth”.
Support is ‘welcome’
Joe Marshall, chief executive of NCUB, said: “Support for small and medium businesses in accessing apprentices is welcome. These businesses often grapple with smaller training budgets, and their engagement with universities is still recovering post-Covid 19.
“However, our larger businesses and employers face significant skills gaps which they alone are unable to resolve. With four in five businesses facing recruitment issues, the nation needs a comprehensive plan to address the crisis. Reforms to apprenticeships must be at the heart of this, transforming the levy into a resource to enable comprehensive workforce skilling.”
The prime minister also announced measures to simplify reporting for small businesses, expected to save businesses £150m a year, the removal of EU reporting requirements in companies’ annual reports, and the creation of a new industry-led ‘invest in women taskforce’.