In a bid to provide more support for smaller-sized businesses, the Prime Minister has announced that SME apprenticeships will be fully funded by the government.
From the 1st of April 2024, the government will pay the full cost of training for anyone up to the age of 21, with the aim of not only reducing costs for SMEs but also creating more opportunities for younger workers.
Prime Minister Rishi Sunak, said, “Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
“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.
“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”
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Responding to the news, REC Deputy Executive, Kate Shoesmith, said, “Cutting the cost of apprenticeships is useful to SMEs in a slow economy and when the volume of young people aged under 24 years old starting an apprenticeship has hardly increased for 20 years.
“But today’s announcements are not the concerted reform of apprenticeships required to better contribute to overcoming labour shortages, shortages which risk costing the economy up to £39bn every year – just short of two entire Elizabeth Lines.
“The lack of bolder reform today means the lack of flexibility to the apprenticeship levy remains a massive contributor to the skills system not working. This is because the funds are only available to those who have the same employer for at least one year – which is the time it takes to complete an apprenticeship.
“Out of the one million temporary workers on assignment in the UK every day, we believe around 960,000 are ineligible for levy funding. This underlines the need for the levy money to pay for modular and shorter courses. Reforming the levy to provide more individuals with a route to skilled work will boost business growth and productivity at a critical time for the economy.”
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