For many small firms, the thought of taking on more than one or two apprentices at once is overwhelming. But that’s no reason to ignore their views on reforms to the programme, warns John Allan.
A year ago we published our apprenticeships manifesto outlining what the Federation of Small Businesses (FSB) wanted to see from reform of the system to make more small firms involved.
We have been part of recent discussions to change the apprenticeship system and see the value that having a truly business-led system could provide to both business and the apprentice.
There is no denying that small firms see the value of apprenticeships and a survey of our members showed more than a quarter (28 per cent) have at some point employed an apprentice.
Encouragingly, this year around 20,000 new apprenticeship places were announced — by both large and small firms. While bigger firms will create thousands of places, small firms usually only take on one or two at a time.
Reforms must not alienate small firms from the system
There are 4.9 m small firms in the UK compared to around 7,000 large businesses, those with more than 250 members of staff.
Our research shows 11 per cent of our members want to take on an apprentice in the next 12 months — this equates to 539,000 of all small businesses.
And if each of those took on just one, it would vastly increase apprenticeship numbers. Proof why the small business voice must be heard and their needs taken into account.
National Apprenticeship Week showcased all that is good about the apprenticeship system. How it can put a young person on the path to a prosperous career.
But reforms must not alienate small firms from the system. One issue our Small Business Index has noted is the increased numbers of members who say finding appropriately skilled staff could limit their ability to meet growth aspirations. Taking on an apprentice could help.
Our apprenticeship manifesto said the new system should be designed with input from business.
And businesses should be able to directly access the funding. So far so good. But we need to work hard on the current consultation to ensure we get the details right.
Small firms don’t have pots of cash to pay for training up front, nor to wait until the apprentice has completed it to claim payment back from the government. Sometimes apprenticeships end and often the reasons for this are not the fault of the employer.
Some larger businesses with vast reserves and profits will also see apprenticeships not work out and when it happens, it has much less of a financial impact.
A small business will already be out of pocket in these circumstances, having invested in an employee the benefit of which they will never see. We do not want to see this situation further hampered by a payment by results system.
Now the reforms are under consultation we need to see government be innovative with how they reach out to small firms.
For example, using business organisations like the FSB and social media channel to get greater engagement will be a good start. Furthermore, putting the design of apprenticeships back into the hand of employers should empower them. What we would like to see is all draft apprenticeship standards undergo a full online public consultation with enough time for small businesses to contribute.
The past 30 years have seen much change to the system. If government is going to design something that doesn’t need another 30 years of change, it needs to make sure it has the right input. Otherwise it risks apprenticeships being just for big business but with a potential half a million that could be created by small firms it just doesn’t make sense.
John Allan, national chairman, Federation of Small Businesses