11 Apr 2024

Apprenticeship reform to offer “significant boost” for automotive sector?

Garages could soon find it easier to take on apprentices, following the Government’s decision to fully fund apprenticeships for young people up to the age of 21 at small businesses from 1 April. A further £60 million is also being spent as a result of the changes, which could pay for up to 20,000 additional places.

Part of the move has been facilitated by reforms to the Apprenticeship Levy, with firms now able to transfer up to 50% of their unused Levy funding to another business. The limit had been  25%. The Apprenticeship Levy was introduced in 2017, but has been criticised because many employers were not using the funding, while also being prevented from passing it to other enterprises to use.

Announcing the changes, Prime Minister Rishi Sunak said: “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.”

Welcoming the measures, IGA Chief Executive Stuart James said: “We applaud the Prime Minister’s proactive approach to supporting small businesses and enhancing apprenticeship opportunities. We are very pleased that the government have listened to the feedback This initiative demonstrates a clear understanding of the vital role that small businesses, including independent garages, play in driving economic growth and fostering innovation.”

Stuart continued: “The pledge of a £60 million investment to facilitate up to 20,000 additional apprenticeships, coupled with the commitment to fully fund apprenticeships in small businesses, represents a significant boost for the automotive industry. By providing financial support for apprenticeship training, the Government is empowering small businesses to cultivate a skilled workforce, ensuring the sustainability and competitiveness of the sector.”

The IGA had raised the need to reduce regulatory burdens around apprenticeships with Robert Halfron, Minister for Skills, Apprenticeships, and Higher Education, and it was hoped that such a move would be announced as part of the Spring Budget.

Changes to company thresholds were also announced, which would make 132,000 more businesses count as small and medium-sized enterprises (SMEs). As a result, they could avoid non-financial reporting requirements.

Stuart added: “The Government’s initiative to slash unnecessary regulatory burdens through Brexit freedoms is a welcome development for small businesses nationwide. Simplifying reporting requirements and reducing administrative red tape will enable independent garages to operate more efficiently, allowing them to focus on delivering exceptional services to their customers.”