Ministers urged to give £350m for apprentices at smaller firms

THE GOVERNMENT will be urged today to commit at least £350m to help smaller and medium sized businesses in the North take on apprentices.

Leaders from the Northern Powerhouse Partnership will urge ministers to guarantee the money in the next Spending Review so small and medium-sized enterprises (SMEs) can hire the skilled apprentices they need to embrace the digital revolution.

The levy requires all employers with an annual wage bill of £3m or more to pay 0.5 per cent of their staff cost into an apprenticeship fund. Businesses can then draw on the fund to finance training. SMEs do not have to pay in.

Speaking ahead of an event in Manchester today, Director of the Northern Powerhouse Partnership Henri Murison said it was assumed that the apprenticeship levy was awash with cash, but with a new national advertising campaign starting to encourage SMEs to take on apprenticeships “it is not entirely clear the money is there to back it up”. There are concerns that the Department for Education is dipping into the business apprenticeship accounts to cover other costs.

Mr Murison said: “There’s £2.6bn currently in large businesses’ accounts that they can draw down, but because they have two years to draw it down, there may be a shortfall. That’s why we are asking the Government to guarantee the money in the Comprehensive Spending Review. SMEs need to be confident the money will be there to pay for their apprenticeships.”

Mr Murison said they were worried the Government had underestimated the numbers going on much more expensive higher and degree apprenticeships and it was now trying to cut the rates paid to universities like Sheffield Hallam and Leeds Beckett. He said: “Our concern is that the Government has got its sums wrong and they will take money off universities in the North who have been successful with degree apprenticeships.

“Raising productivity is vital, and apprenticeships must be a non-negotiable part of the government’s Industrial Strategy.”

Apprentices from major employers including Associated British Ports, which runs a marine pilotage apprenticeship scheme on the Humber, will be at the event at Media City, Salford.

Despite Government plans to create three million apprenticeships by 2020, numbers starting new programmes in England have dropped.

Research in October suggested numbers had fallen by around 30 per cent in and around West Yorkshire over the past year.

The Government says in 2019/20 there will be £2.45bn available for apprentices, double the annual spending in 2010-11.

Funding beyond 2020 depends on the next Spending Review, but it insists that everything from the employers’ levy is solely for the training of their apprentices.

Our concern is that the Government has got its sums wrong.

Henri Murison, Director of the Northern Powerhouse Partnership.