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Spring statement: £80m to help small firms recruit apprentices

Some businesses find the apprenticeship system challenging, Chancellor Phillip Hammond admitted today

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Some businesses find the apprenticeship system challenging, Chancellor Phillip Hammond admitted today

The government has promised tens of millions to encourage small businesses to take on apprentices.

During his spring statement speech to MPs, chancellor Philip Hammond reiterated the government’s commitment to “delivering 3 million apprenticeship starts by 2020 with the support of business through the apprenticeship levy”.

He added: “But we recognise the challenges the new system presents to some small businesses looking to employ an apprentice. So I can announce today that my right honourable friend the education secretary will release up to £80m funding to support those small businesses in engaging an apprentice.”

Mr Hammond also pledged more support to help employers get ready for T levels, which he described as “the most ambitious post-16 reforms in 70 years”.

He said that from next month, £50m will be available to help employers prepare for the roll-out of T level work placements.

The chancellor gave a brief update on the government’s National Retraining Scheme. He said: “Last week the education secretary and I chaired the first meeting of the national retraining partnership between the government, the TUC, and the CBI […] there was a clear and shared commitment to training, to prepare the British people for a better future ahead”.

He added: “And next month, our £29m construction skills fund will open for bids to fund up to 20 construction skills villages around the country”.

Mr Hammond did not address the warnings made in a new report today that the National Retraining Scheme risks failing to help millions of people unless it is focussed on adults rather than employers.

Nor did he mention the fiscal state of the FE sector, with the Association of Colleges having warned today of worsening financial outlook for colleges across England.

Reaction

Responding to the spring statement, Stephen Evans, chief executive, Learning and Work Institute, said: “We need to invest in high-quality learning, skills and employment. The extra £80 million to support SMEs to take on apprentices is welcome, but more fundamental changes are needed too”.

He added: “Alongside increased investment, we need new ways to engage adults in learning, a drive to improve literacy and numeracy among the nine million adults that lack these skills, and a bigger ambition to help more people with health problems and disabilities back to work”.

Petra Wilton, director of strategy for the Chartered Management Institute, said: "The chancellor’s £80m helping hand for small businesses access the apprenticeship levy is brilliant news enabling more people to benefit from apprenticeships, and will be music to the ears of employers and learners. According to our research, 81 per cent of bosses want access to the digital apprenticeships service to be extended to small businesses to drive up apprenticeship numbers. The majority also back levy funding to be spent on apprenticeships for all ages".

The £80m in apprenticeship-related funding announced today is unlikely to be 'new money', according to the Association of Employment and Learning Providers (AELP). Mark Dawe, the organisation’s chief executive, said: “Our early understanding is that this is growth money within the £650m funding already promised”.

He added: “While any growth funding is very welcome, until the government remove the 10% employer contribution for under 24 apprentices and commit to an annual non-levy budget of £1bn, the apprenticeship starts are not even going to reach the level they were before the levy was introduced - let alone exceed them”.

Union hits out

The spring statement has failed to “tackle the crisis in education funding caused by the Government’s real terms cuts,” according to Dr Mary Bousted, joint general secretary of the National Education Union.

She added: “It is impossible to tell whether the £500m for T-levels, first announced last year, or the £50m to help employers provide T-level students’ work placements will be sufficient to fund the number of people the Government expects to do them”.

Dr Bousted also criticised the decision to support small firms in recruiting apprentices. “When education funding is so stretched, it is wrong to fund work placements and apprenticeships from the education budget”.

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