Sunak apprenticeship plan 'positive but not enough'

Prime Minister Rishi Sunak has set out a major package of reforms which he claims will support businesses to deliver more apprenticeship places, cut red tape for SMEs and leverage more private investment in female business founders.

In a speech at the Business Connect conference in Warwickshire, Sunak said the Government will fully fund apprenticeships in small businesses from April 1 by paying the full cost of training for anyone up to the age of 21 – reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.

This will remove the need for small employers to meet some of the cost of training and saves time and costs for providers like further education colleges who currently need to source funding separately from the government and businesses.

The move is underpinned by an additional £60m of new Government funding for next year, which it is claimed will guarantee that where there is demand for apprenticeships from businesses, the Government will ensure there is enough funding to deliver them.

From the start of April, the Government will also increase the amount of funding that employers who are paying the Apprenticeship Levy can pass onto other businesses. Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer.

Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices. This, the Government maintains, will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people in a huge range of sectors, industries, and professions.

Taken together, the Government insists these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people.

Sunak said: “Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this Government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.”

In response, the National Centre for Universities & Business said that while it is a positive signal of continued support for a co-delivery education model across universities and businesses, the Apprenticeship Levy continues to be too inflexible and this is a huge barrier to further growth.

Companies face acute skills gaps, and are unable to use their levy funds to up- and re-skill their workforce, chief executive Dr Joe Marshall claims.

He added: “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.”