SMEs to utilise apprenticeship fund

News that small and medium sized businesses will be expected to draw from the proposed. Apprenticeship Levy has been received with some concern by SMEs across the country. Although only employers with a wage bill of over £3 million will pay into the scheme, the funds will be available to businesses of all sizes and SMEs will be encouraged to apply for assistance if they wish to employ and train apprentices. While this places such businesses at the heart of the Government’s plans to train the next generation of workers and reaffirms their position at the centre of the British economy as a powerful driver of growth and financial stability, it also raises a number of important questions.

The Apprenticeship Levy will come into force in 2017 and will involve larger business paying 0.5% of their pay bill into a national fund, from which companies can draw in order to train apprentices and develop the talents of those entering the nation’s workforce. However, the Government doesn’t expect every organisation that pays into the scheme to fully utilise their share of the fund, leaving a surplus to spend on those smaller businesses that aren’t required to pay in. An estimated £3 billion will be available in 2019/20 and it is hoped that this will benefit organisations of every conceivable size operating in the UK.

The proposals have caused some confusion and government ministers could be forced to clarify the situation. One of the biggest questions raised concerning the levy is whether SMEs will be made to rely on the left over funds generated by the Apprenticeship Levy instead of receiving other government funding. If this is to be the case, many SMEs will have doubts about the scheme. By relying solely on those funds left over by bigger organisations, smaller businesses may be put in precarious situations whereby they are dependent on big businesses not taking their share.

Further technical details relating to the way in which the Levy will operate are expected in the coming weeks and SME owners will hope that their situation will be clarified by Skills Minister Nick Boles. Apprenticeships have formed an important part of policy for the current government, as they tried to shift focus away from certain types of further education to offer a more balanced approach to education, training and career development. However, it remains to be seen what role SMEs have to play in this plan.

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