Apprenticeships Work welcomes the Chancellor’s decision to fully fund all apprenticeships for under-25s in SMEs. This is an important step towards easing training costs for small and medium-sized businesses. We would also welcome the publication of the evidence informing this policy, including any assessment of the impact of fully funding training for under-22s to date.
However, training costs are only one of several barriers that limit SME engagement with apprenticeships. Edge’s polling with the REC shows that 37.4% of SMEs remain unaware that training for under-22s is already fully funded. Local brokerage services have a crucial role to play in helping SMEs understand the benefits apprenticeships can bring. It also remains unclear to what extent these gains may be offset by the rise in the apprenticeship minimum wage, which introduces further financial pressure. Addressing these challenges is essential if we are to deliver the Youth Guarantee. In particular, careful consideration is needed to ensure that the six-month paid work placements for eligible 18–21-year-olds provide clear and effective pathways into full-time apprenticeships.
We would also welcome reassurance that wider reforms to the apprenticeship system will not disadvantage SMEs, including clarity on how the reduction of the levy expiry window from two years to one may affect the volume of levy funds available for transfer, and how the proposed ‘streamlining’ of apprenticeship standards will avoid limiting choice, particularly at entry levels.