Edge Foundation and 28 business leaders and sector stakeholders who are partners in Apprenticeships Work have signed and sent a letter to Pat McFadden MP, the Secretary of State for Work and Pensions.
Apprenticeships Work welcomes today's announcement on reforming the skills system and the ambition to unlock 200,000 new jobs and apprenticeships for young people. In particular, we welcome the decision to increase the incentive payment for SMEs hiring a young apprentice to £2,000.
In our letter to the Secretary of State in December, we called for the Government to review financial incentives for SMEs, including whether the existing £1,000 grant was sufficient to encourage small businesses to hire young apprentices. With SME apprenticeship numbers declining in recent years and many small firms facing significant cost pressures, increasing the incentive is a positive and welcome step. However, financial pressures are only part of the challenge. SMEs also need practical support to navigate the apprenticeship system, from understanding the full range of incentives available to finding the right training provider and identifying an apprenticeship standard that meets their skills needs. Our polling found that almost half of SMEs are unaware of the existing grant for 16–18 year-old apprentices, highlighting the need for clearer guidance and stronger brokerage support. It is therefore vital that the Government explores how brokerage support can be expanded, building on the MSA brokerage pilot currently in development and evidence from the National Apprenticeship Hub Network.
This support will be particularly important as the apprenticeship system undergoes significant change, including the expansion of foundation apprenticeships, the introduction of new apprenticeship units, and wider funding reforms. At the same time, decisions such as the defunding of the Lead Practitioner in Adult Care standard risk hitting SMEs hard, given they accounted for 49% of starts on that programme in 2022/23. Ensuring SMEs can navigate these changes will be critical if today’s ambitions are to translate into real apprenticeship opportunities.