- Changes to the apprenticeship system must encourage more small firms to take on apprentices, as latest Government figures show another drop in starts for the lower levels.
- FSB’s new research shows only 2% of small business employers would take on apprentices if they had to fund the training costs currently met by Government.
The latest Department for Education apprenticeship starts figures for August 2023 - July 2024, released today, show that although starts figures in England have increased overall, both intermediate and advanced (Levels 2 and 3) have fallen by around 7.1% and 0.95% respectively, in comparison to the previous year. Many of the apprenticeships offered by SMEs are Levels 2 and 3.
Federation of Small Businesses (FSB) Policy Chair Tina McKenzie said: “It’s disappointing to see another drop in apprenticeship starts at these lower levels, showing that support is needed to ensure more small firms are taking on entry-level apprentices.
“The Government’s newly announced Growth and Skills Levy must help to drive forward productivity in the economy, increasing the co-ordination within the skills system – and crucially helping to close the chronic skills gaps that still exist. Refocusing the system on lower-level apprenticeships will be hugely beneficial and in turn provide more options for young people.
“It’s vital that, going forward, Government funding supports small businesses to recruit talented young people as apprentices, as well as allowing small firms to grow and flourish.”
Current funding from Government, which contributes 95% or 100% towards apprenticeship training costs for non-Levy-paying businesses, is crucial for small firms and must be protected – ensuring the number of starts does not drop further.
New figures from FSB have revealed that only 2% of small business employers would take on apprentices if they had to fund apprenticeship training costs currently met by Government. Of those small firms that already employ an apprentice, 89% say it would be less likely or impossible to take on more if the Government’s contribution to apprenticeship training costs is removed or reduced.
Providing more incentives to small firms would help to increase starts across England, spurring productivity. FSB’s new research also shows:
- Almost three quarters (73%) of small employers who currently employ apprentices say the reintroduction of the £3,000 incentive to hire apprentices would encourage them to take on more in the future.
- 62% of small business employers who currently employ apprentices, say support with apprenticeship pay would encourage them to take on more in the future.
FSB Policy Chair Tina McKenzie adds: “It’s so important that small businesses are kept at the centre of the skills system, and importantly, Government must keep employers engaged on these issues.
“We’d like to see Government setting targets to increase the number of more accessible apprenticeship starts in small businesses as well as committing to continue funding current levels of co-investment in apprenticeship training costs for non-Levy paying businesses.
“Time and resources are in short supply for small businesses and so protecting levels of funding for training costs and providing financial incentives would help to improve the number of small firms entering the apprenticeship system.”