Apprenticeships change is a good first step

WE know that apprenticeships are a great way for people to develop in the world of work; and for businesses to boost their recruitment and retention.

In his latest announcements, Rishi Sunak stated that all small businesses can expect to have no training costs for apprenticeships for employees who are 21 and under..

For those of all ages, the Government is making it easier for large employers to help small businesses with the costs of training, at no additional cost to what they are currently spending through the Apprenticeship Levy.

Without boring you with too much detail, the Apprenticeship Levy is a pot of money larger employers (those who have a wage bill of over £3m per year) have to pay into, but are then able to use for either taking on new apprentices, or upskilling their existing staff through higher level apprenticeships. However, not all employers spend their full Apprenticeship Levy funds. For those that don’t, that money is either claimed by the Government, or the employer can choose to share one quarter of their unspent levy with smaller employers.

As part of Mr Sunak’s new announcements last week, employers can now share half of their unspent levy with smaller firms. Again, this is really positive news, but it relies on businesses knowing how to share their levy, and smaller firms knowing this is even an option they can take advantage of. Data would suggest this isn’t the case, with only 2.7% of levy-paying businesses transferring their unspent funds to smaller businesses.

As a Chamber, we wrote to Jeremy Hunt at the start of the year, saying that more needs to be done to help businesses access unspent levy funds, as well as broadening the Apprenticeship Levy for other types of accredited training. Through our research in the North of Tyne and Tees Valley, we know many employers would prefer shorter, ‘bootcamp’ style training.

For those that haven’t worked in a while, this can often seem like a much more achievable way to get back into employment.

This isn’t to say that apprenticeships aren’t fantastic – they really are – but with an ageing workforce and high numbers of people struggling to access work, we need to be able to upskill people in a way that suits all. Across the UK, the Prime Minister’s announcement hopes to support 20,000 more apprenticeships; a really positive step in the right direction. But in order to allow businesses to become more productive, and help support people into higher-skilled, secure jobs, there is still some way to go.

Unlocking more training opportunities for the small businesses that form the bedrock of our economy will be critical to this.