Funding cuts may destroy boom in apprentice jobs
FUNDING cuts planned by the Coalition for next year will stop the apprenticeship boom in its tracks, companies have warned.
The Queen’s Speech last week included the announcement of two million apprenticeships having been created by the end of this Parliament. But companies fear that plans unveiled in February to cut funding could destroy the programme.
By August 2015, fully funded apprenticeships will cease and employers will need to pay up to a third of future apprenticeship training costs, as well as designing and running courses with colleges.
There will be five bands that set out the maximum Government funding depending on the industry, but it has not yet been announced which band industries will fall into or when that decision will be made.
The National Hairdressers’ Federation is concerned about what salons will have to pay towards the cost of new, employer-led apprenticeships when they are rolled out from next year.
The concerns are thought to be shared by other industry groups, and a number of individual companies have also voiced fears they will have to curtail apprenticeship plans.
Barbara McNaughton, 54, who founded the Elements hair salon in Oxted, Surrey, said: ‘I currently employ eight apprentices. I struggle to see how it’s feasible for a high street business to build in the additional cost of employer contributions, on top of the wages we pay our apprentices. Many of the smaller salons will simply stop taking on apprentices.’
The NHF has said it is worried that forcing employers and training providers to negotiate on funding could create a market where education is driven by price rather than quality.
The Government is encouraging employers to take the lead in developing several ‘trailblazer’ projects to design new apprenticeship standards in various sectors.
But the NHF says it is concerned because it has only just found out from the Government that industries that develop trailblazer standards will be expected to pilot the funding reforms.
Hellen Ward, 47, managing director of Richard Ward Hair and Metrospa in Chelsea, South-West London, who is heading the strategic group on hairdressing, said: ‘Our trailblazer group was unaware our sectors would be piloting these funding reforms and it is a concern to us that the Government kept us in the dark.
‘This process needs to be open, honest and transparent if we are to achieve an apprenticeship system that is fit for purpose.’
Recent research from the Electrical Contractors Association showed 94 per cent of businesses would cut down or stop hiring apprentices due to the extra responsibilities.
Electrical contractor GF Electrical in Poole, Dorset, said the proposed changes to funding will burden many small firms and threaten the next generation of apprentices.
Michelle Fisher, 39, who runs the company with her husband Gary, 43, said: ‘It is really sad to think that we might not go forward with apprenticeships if the Government continues with a proposal like this, because we cannot put our business at risk.’
Fisher said if firms pay training costs for apprenticeships, they bear a risk that employees could take the training and then leave before the company gets any benefit.
She said the Government needed to make clear how much compensation a company might get if that happens.