April 20, 2024

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Growing Innovation, Growing Business

Rishi Sunak announces full apprenticeship funding for small businesses

4 min read

Major package of reforms to support small businesses in PM’s first economic speech since the Spring Budget

In a speech yesterday, Prime Minister Rishi Sunak announced that the government will fully fund small business apprenticeships from 1 April this year by paying the full cost of training for anyone up to the age of 21. The move is designed to reduce some of the costs associated with taking on apprentices and provide more opportunities for young people to kick start their careers.

In addition, the government will also increase the amount of funding that companies who are paying the apprenticeship levy can pass onto other businesses. At present, apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer. From 6 April, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices.

To enable the up to 20,000 new apprenticeships these new measures are designed to create, the Prime Minister also pledged £60m of new investment for next year.

As well as his announcements relating to apprenticeships, Rishi Sunak also unveiled a new industry led taskforce to boost private investment in organisations led by women. The Invest in Women Taskforce is designed to unlock private investment in female business leaders and make the UK the best place in the world to be a female founder.

Prime Minister Rishi Sunak said: “Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.

“Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.

“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”

Hannah Bernard OBE, Co-Chair of the Invest in Women taskforce and Head of Business Banking, Barclays UK, said: “This is an area I am incredibly passionate about, so it is a privilege to be offered this position.

“I believe that the key to the UK’s growth will be enabling every single entrepreneur in this country to thrive; female entrepreneurs face significantly higher barriers to get their businesses the support and investment they need, from seed funding for start-ups, through to the challenges of gaining scale-up investment.

“I’m really excited to be working with Debbie who is an ideal partner given her entrepreneurial credentials and I believe together, we can make a real difference.”

Debbie Wosskow OBE, Co-Chair of the Invest in Women taskforce and multi exit entrepreneur, said: “Women leading businesses shouldn’t have to face funding challenges to build and grow their business, because of their gender.

“As an experienced entrepreneur, who founded her first business 25 years ago, I know first-hand the importance of breaking down barriers and making meaningful change for female led businesses.

“By putting funding front and centre of this Taskforce, we aim to make the UK the best place in the world to be a female founder.”

Industry reactions

Commenting on the apprenticeships announcement, Stephen Phipson, CEO of Make UK, said: “Industry will welcome this boost for Apprenticeships, for whom they are heartbeat of many companies. We now need to build on this with a skills revolution, starting with substantial employer-driven reforms of the Apprentice Levy and, a complete review of the vocational skills system within a long-term industrial strategy. This must be a national endeavour to equip the current, and next, generation workforce with the digital skills they will need for the many jobs of the future that have yet to be invented. This revolution must also start within the education system so that we have a constant pipeline of talent to fuel the expansion of manufacturing.”

Following the announcement, Beatrice Barleon, Head of Policy & Public Affairs at EngineeringUK, said: “We welcome the Government’s commitment to offer more support for apprenticeships, particularly recognising the need to support small to medium sized enterprises (SMEs) with taking on more apprentices.

“We are particularly pleased to see the focus for the support is on young people aged 21 or under. Refocusing some of the apprenticeship budget money for young people is something we have called for in our recent ‘Fit for the future’ report with Lord Willetts and Lord Knight.

“While these measures are certainly a step in the right direction, more still needs to be done to ensure our apprenticeships system is a success. Government needs to consider the recommendations put to them as to how to better support SMEs with the processes surrounding apprenticeships and how to better help young people to be able to access the opportunities available and be ready for work.

“It’s clear there is still an apparent, and growing, mismatch between levy intake and the apprenticeship budget. In light of apprenticeship numbers needing to grow to meet demand in the engineering and technology sector, we would like to see greater transparency as to how this additional money is currently being spent.”


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