The Government has announced that it will reduce the co-investment rate for small firms as part of the Autumn budget.
Responding to the Chancellor’s Autumn Budget statement, Federation of Small Businesses (FSB) National Chairman Mike Cherry said“Apprenticeship starts have plummeted over the last year following the introduction of burdensome co-investment costs for small firms who want to bring young people into the workplace. Dropping the proportion of apprenticeship training costs footed by small firms from 10 percent to 5 is a much-needed development which should go some way to arresting the shocking decline in apprenticeship starts. If we want parity of esteem between vocational and academic routes into the workplace, we need to incentivise small firms to take on apprentices. Today’s announcement marks a step forward.”
“Low take-up of apprentices by small businesses has been a quandary for the Government since the levy was introduced and employers will cheer the decision to reduce the co-investment rate for small firms. Coupled with the Chancellor’s recent announcement on levy transfers, this move should help to unblock the apprenticeship pipeline for non-levy payers. The onus should now be on businesses across the board to take advantage of these new measures when they come into force.
“However, technological and demographic changes will shift the goalposts for employers more than ever in the coming years, and the race to build genuine flexibility into the UK skills framework is far from won. Looking ahead, the aim should still be for the levy to do more heavy lifting. A wider training levy, one that acknowledges a much wider need for flexible provision on top of apprenticeships, should remain the goal for ministers as they plan beyond this parliament.”