Home Business SME’s welcome apprenticeship funding of £2.7 billion by 2024-25 in the Autumn budget

SME’s welcome apprenticeship funding of £2.7 billion by 2024-25 in the Autumn budget

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By: Neil Davies, Chief Executive, Commercial Division, Close Brothers Group.

In the wake of a challenging time, particularly for small businesses, the Chancellor’s recent announcement of an additional £2.7 billion funding for apprenticeships by 2024-25 was welcome news. Not only will this injection fuel business recovery, it will also help young people secure work. Apprenticeships are a great way for UK SMEs to fill skill gaps, develop their future workforce, and improve their long-term growth prospects.

Pros and cons of apprenticeships for business 

Gratification and the joy of mentoring aside, there are tangible business benefits of having apprentices as part of your workforce.  Motivated correctly, they will breathe new life into your business helping to challenge traditional ways of working and, in turn, boost effectiveness. But this benefit will only be realised by devoting enough time and effort to developing them. After all, apprenticeship schemes are designed to ensure that your business has precisely the skills it needs, and being a smaller business allows you to instil your personal knowledge of the company to your new recruits.

Cost, however, is always a factor to consider. The UK hourly apprentice minimum wage is currently £4.50 and, don’t forget, this applies to training too. Apprenticeship schemes can last anything between one and five years, so you’ll be expected to provide the same benefits to those serving as apprentices as you do to all full-time staff. This includes sick and holiday pay. But it is worth remembering there are several financial assistance routes to explore.  For example, The National Apprenticeship Service can cover 100% of the cost in some situations, depending on the age of the apprentice and the industry.

Apprenticeships like most other jobs have also experienced sector wide changes as a result of the pandemic and hybrid working can be difficult. When looking at practical apprenticeships in construction or manufacturing, training cannot wholly move online, lots of the students training requires additional tools or equipment that they would not have access to while at home. Apprentices can also require higher levels of training and contact with senior team members who they can learn from which just isn’t possible while working remotely. According to data from The Sutton Trust, 37% of employers reported that some of their apprentices were not able to work from home for this very reason. However, as we enter a post-pandemic era in which things have greatly opened up, this shouldn’t remain a deterrent. 

Close Brothers SME apprenticeship programme 

Apprenticeships overall are valuable and rewarding and this year the Close Brothers SME apprenticeship programme has funded an additional 15 apprentices who joined the programme in the start of 2021, marking the program’s fifth phase. Close Brothers has assisted SMEs across the UK in recruiting and training a new generation of apprentices with the help of the University of Sheffield AMRC Training Centre, the Manufacturing Technologies Association (MTA), the Road Haulage Association (RHA), and the manufacturers organisation Make UK. 

The programme gives employers financial help towards taking on apprentices in the manufacturing and transport sectors, creating opportunities for young people and helping businesses across Britain to thrive in the longer term. Close Brothers covers all training costs, and contributes 50 per cent of the wages of the apprentices in the first year and 25 per cent in the second year. Further support is also offered for those on degree apprenticeships. 

Close Brothers has been funding apprenticeships since the programme launched in 2015 and many apprentices have been trained by the AMRC Training Centre in Rotherham.

Without doubt hiring an apprentice will prove beneficial but, much like signing up to a fitness plan or a healthy eating regime, it requires commitment and nurturing. Not only are apprenticeships educational and beneficial; they are also crucial for economic growth because they can help close the ongoing skills gap. It is encouraging to see that the Chancellor has recognised this and is allocating more funds to ensure that apprenticeship programmes continue across the country.

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