Following the appointment of Gavin Williamson as Secretary of State for Education, the Federation of Small Businesses (FSB) says it is crucial that he turns his attention to apprenticeships — not only because the number of apprenticeships in smaller firms has declined but also because the funding for these apprenticeships is set to run out in the near future.
Throughout the 2018/19 academic year, new apprenticeship starts were only marginally up (6.6%) on the figures for the previous year, but this compares to a 30% fall from the year before the reforms.
) national chairman Mike Cherry said: “As more large businesses use up their levy funds, the apprenticeship funding system will be unable to cope with the demand.
Apprenticeship funding needs to be urgently shored up to ensure that small firms can still take on apprentices and are not excluded from the system.
"The complexities and challenges in the system need to be addressed as well. Despite the increase in uptake this academic year, progress remains sluggish, and Level 2 apprenticeships are in decline.
“The new Education Secretary must use this moment to address the issues that the apprenticeship system and small businesses face.
"Unless urgent action is taken now, many small firms will simply be unable to afford to take on an apprentice, so numbers will fall even further.
"If we are to address the persistent skills shortages and gaps that are damaging growth and productivity, then we must prevent apprenticeships becoming an opportunity only open to those who can afford it.”
Meanwhile, the FSB is also urging Prime Minister Boris Johnson to address key issues affecting small firms and modernise the regressive business rates system by extending the two-year 33% discount enjoyed by small retailers (with rateable values up to £51,000) to manufacturers — and making this discount permanent.
He should also: help small businesses that are struggling with spiralling employment costs by uprating the £3,000 Employment Allowance; deliver a promised national insurance holiday for firms that employ those ‘furthest from the labour market’; introduce a rebate for Statutory Sick Pay; and shore up apprenticeship funding by ensuring that small firms are not excluded from the apprenticeship system.
The FSB also want the PM to increase investment in the UK’s broadband and phone infrastructure.
Mr Cherry said: “We need to see a real sense of urgency from the new Prime Minister, when it comes to creating a pro-enterprise environment.
“As things stand, small-business confidence is at ‘rock bottom’: political uncertainty has left us unable to invest, grow and plan for the future.
“The UK has long been one of the best places in the world to do business.
“It’s crucial that we keep it that way.”