Time is ripe for Government to scrap apprenticeship fees for SMEs
25 June 2018
With the latest Government figures underlining the extent of the challenge to improve the popularity of apprenticeship schemes, the revelation that small businesses may no longer face a 10 per cent charge when taking on an apprentice could provide some much-needed optimism.
Since the Apprenticeship Levy was brought in, starts have fallen off a cliff – the 23,900 starts in March 2018, for example, totalled less than half that of March 2017. The Levy was intended to help to meet the Government commitment of three million apprenticeship starts in 2020, a target that now seems almost certain to be missed. Instead, employers tell us that often the reason for the current poor take-up is related to confusion around navigating the system.
Given the current weakness in the number of new apprenticeship starts, and with Brexit now firmly on the horizon, wouldn’t it be a timely boost for Britain’s small and medium-sized businesses (SMEs) to have this 10 per cent charge removed? SMEs are exempt from paying the Levy, but are vital in terms of the apprenticeship system succeeding. There were 5.7 million SMEs in the UK in 2017, accounting for over 99% of all businesses; comfortably the most significant pool from which to drive up apprenticeship numbers.
If SMEs are no longer responsible for any associated costs with training apprentices, then not only will their business benefit from gaining new motivated employees, it would also provide people with more opportunities to access an apprenticeship scheme, thus helping to narrow the UK’s skills gap.
AAT research has found that nine out of ten small businesses who have apprentices have found that they have boosted productivity, while 97 per cent of those also said that an apprentice has been good value for money for them. And apprenticeship opportunities are available for all, not just school leavers. If there is an existing member of staff who would like some finance skills, for example, an apprenticeship could be ideal for them.
Let’s hope the Government is prepared to take this bold step forward to provide greater support for SMEs and the apprenticeship system as a whole.
