Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

ApprenticeshipsLatest NewsLearning & development

Small businesses seek urgent apprenticeship reforms

by Ashleigh Webber 26 Apr 2019
by Ashleigh Webber 26 Apr 2019 Image: Shutterstock
Image: Shutterstock

The government is in serious danger of making apprenticeships unaffordable for smaller businesses, with reforms urgently needed to curb the continued decline in apprentice numbers.

The Federation of Small Businesses (FSB) claimed today (26 April) that more than a quarter of smaller organisations that employed apprentices before and after the apprenticeship levy was introduced said it has had a negative impact on their business.

Apprenticeship levy

Employers access a tenth of apprenticeship levy funds

‘Use the apprenticeship levy to improve management’ – Cary Cooper

Use or share apprenticeship levy funds, employers urged

Recruiting an apprentice was the biggest challenge for employers, with 42% struggling to do so. Almost a third (29%) said allocating management time to supervise apprentices was a barrier, while nearly a quarter said meeting the requirement for 20% of the training to be done “off the job” was a challenge.

Since the apprenticeship levy was introduced in 2017, the number of apprentice starts has fallen below pre-reform levels, although the figures have recently recovered slightly. Between August 2018 and January 2019 225,800 people began an apprenticeship, compared with 206,100 in the equivalent period of 2017/18. However, 269,600 starts were reported in the same period in 2016/17, before the levy was introduced.

Around 87% of apprenticeships offered by smaller organisations are at levels 2 and 3. The number of level 2 starts has fallen by 45% since 2015/16, while level 3 starts have dropped 13%.

FSB chairman Mike Cherry said that although the levy had deterred many small organisations from offering apprenticeships, recent changes had offered some encouragement and more support should be introduced.

“The more recent halving of the co-investment requirement to 5% is a major step forward to reduce the cost of apprenticeships. Small businesses need more support like this if they are to continue to be the champions of apprenticeships,” he said.

“It must not be forgotten that our small firms provide 60% of private employment and it is for this reason that they must be the ones driving the system forward.”

Funding concerns

Cherry also had concerns about the “funding black hole” that the National Audit Office claimed would likely hit the apprenticeship levy programme in the next couple of years, due to employers opting for higher level apprenticeships at greater cost.

The FSB urged the government to put apprenticeship funding on sustainable footing.

Affordability was a concern for many small employers – four in 10 said costs related to recruiting and training apprentices had increased.

Even larger organisations have struggled to make apprenticeships financially viable: last month Tesco boss Dave Lewis said the retailer had been prevented from taking on more apprentices cost-effectively.

“Unless urgent action is taken we are in serious danger of making apprenticeships unaffordable for many of our small firms. If apprenticeships become a privilege only for those that can afford them, we will worsen persistent skills shortages and gaps that are damaging growth and productivity,” said Cherry.

The FSB recommended that the government should:

  • Develop a matching service, hosted by the Apprenticeship Service, to support levy-paying employers pass on any unused funds to non-levy paying organisations
  • Extend the current £1,000 incentive to employers with less than 50 employees who take on a new apprentice aged between 19 and 24 from selected disadvantaged groups, including people with a chronic mental health condition and ex-offenders
  • Consider whether an incentive for start-ups to take on an apprentice should be introduced, and make training-related travel free for 16-24-year-old apprentices working for employers with fewer than 50 staff, to ensure they are not disadvantaged by prohibitive costs.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

 

L&D job opportunities on Personnel Today

Browse more L&D jobs

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

previous post
Almost half a million staff paid below the legal minimum
next post
Women postgraduates earn less than men with first degrees

You may also like

Teacher apprenticeship route to be tied to school...

9 May 2025

High-level apprenticeship spend doubles in five years

16 Apr 2025

‘Clean power army’ to create thousands of jobs

7 Apr 2025

HR and businesses respond to Spring Statement

26 Mar 2025

Why the apprenticeship shakeup is good news for...

20 Mar 2025

Lower socio-economic background graduates ‘overlooked’ in hiring

7 Mar 2025

National Apprenticeship Week: Transforming the role of skills

14 Feb 2025

The future of apprenticeships: Why higher wages are...

14 Feb 2025

Tesco pledges 1,500 apprenticeship places by 2027

12 Feb 2025

Shorter, more flexible apprenticeships revealed by government

11 Feb 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+