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Government is advised to improve SME awareness of apprenticeships

29 August 2012

According to a report from businessman Jason Holt, the proportion of take up of apprenticeships among SMEs is, at best, just under 10 percent.

Vince Cable
Vince Cable

This is less than half that of larger companies, despite SMEs making up an estimated 99 percent of all businesses.

Responding to the report, which was commissioned by the education and business secretaries, the government says it will increase awareness among small and medium enterprises (SMEs) of the benefits of apprenticeships, and make support for small businesses taking on apprentices simpler and more accessible.

The Education and Business Secretaries commissioned Mr Holt’s report in February to advise them on what more could be done to help SMEs take on apprentices. Drawing on his discussions with small firms, Jason Holt points to a lack of awareness among small businesses about the benefits of taking on apprentices and how to recruit and train them.

New measures will see the government:
- Work with the people that SMEs look to for advice, including lawyers and accountants, to promote apprenticeships to their SME customers
- Enable SMEs to get their apprentices the training they need, by providing better information on availability and investigating how to give them a greater say in developing the skills they need
- Improve the performance of providers of training to SMEs by agreeing standards and the consequences of not meeting them
-Improve the Apprenticeship Grant for Employers by making it simpler and more accessible to more employers.

Business secretary Vince Cable (pictured) said most SMEs are missing out on an effective way of growing and up-skilling their businesses. He hopes that these measures will make a difference by raising awareness of the benefits of apprenticeships amongst SMEs and making it as easy as possible for these businesses to take on an apprentice.

“Whilst apprenticeships offer undoubted growth opportunities for businesses, not enough SMEs are taking advantage," says Mr Holt. "This is because they have an outdated view of apprenticeships, are often in the dark, and frequently do not receive the specific training provision their apprentices need. My recommendations are intended to address these issues with Government, employers and providers all playing a part.”

Tim Thomas, head of employment and skills at the Engineering Employers' Federation (EEF), said manufacturers will welcome the announcement to relax the criteria attached to the Apprenticeship Grant for Employers, improve the responsiveness of providers and focus on the needs of employers and the skills they require. "We should now look to Government for tangible progress in all these areas, which has to date been too slow," he says.

“The manufacturing industry has a long and proud history of investing in apprenticeship programmes, but was disadvantaged by the requirements of the Apprenticeship Grant for Employers scheme," Mr Thomas continues.

"Relaxing the requirements in the way Government has outlined will allow businesses to take on more apprentices and offer these invaluable opportunities to young people. Although the grant is relatively small in comparison to the overall cost of delivering manufacturing apprentices, it will go some way to incentivising employers to take on an additional young apprentice.

“If the Government is serious about encouraging more young people to undertake apprentices, and more employers to offer apprenticeships, it must address issues such as careers advice, the status of vocational education and the regulatory burden that still prevents many small businesses from taking on apprentices.”

Jim Bligh, CBI head of labour market policy, said: “SMEs are a major untapped source of apprenticeships, so it’s good that this review shows how complex the current process has become for smaller firms to deal with. SMEs need better local advice and systems in place which help them get started providing on-the-job training for new apprentices. Making sure SMEs realise the value of taking on apprentices is critical, and incentives like the newly expanded Apprenticeships Grant for Employers can make all the difference.”

Jason Holt’s full report can be read here.

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