Comment from Chris Griesbach, Commercial Director at technology provider Probrand.
Another year nearly over, another Autumn Statement due from the Chancellor. Much talk in the build up to the statement has centred around cuts to tax and business rates for SMEs. But it’s the potential reforms to apprenticeships that could also deliver significant benefits to UK businesses.
Since modern apprenticeships were launched, we have seen a steady increase in businesses adopting the model to bridge the skills gap and nurture and train young people. This system has worked well across the board, but especially in the technology sector where it is well documented that a lack of skills is hampering innovation.
The shake-up, which will hopefully be endorsed by the Chancellor on 5th December, will allow companies to plan and manage training for their own apprentices and to claim government subsidies, potentially through tax returns. Rather than having a prescribed training provider assigned to them, this is an encouraging initiative to hand the power back to the employer.
This year the government launched a ten week consultation with businesses, asking them to consider how the three options proposed would affect them. The three proposals, which can be viewed on the gov.uk website, were:
Model 1: Direct Payment Model
– Businesses register Apprentices and report claims for government funding through a new online system. Government funding is then paid directly into their bank account.
Model 2: PAYE Payment Model
– Businesses register Apprentices through a new online system and then recover government funding through their PAYE return.
Model 3: Provider Payment Model
– Registered training providers will make claims for government funding, when they have received the employer’s financial contribution.
The aim, of course, is to encourage more businesses to take on apprentices by providing a more efficient and beneficial system. It is also to build a platform that can provide businesses with more freedom to manage apprenticeships in ways that suit their company best.
A greater degree of freedom can only be a good thing. We want more businesses, big and small, to provide opportunities that benefit the apprentice as well as the company. Today’s apprentices are filling essential roles across organisations. Encouraging businesses to take on more young people is imperative to overcoming social and economic barriers to growth.
Taking on apprentices is key for the next generation, for business innovation and for the economy as a whole but companies must be allowed to tailor training to fit their business requirements - without losing out on financial incentives. We welcome the Chancellor’s comments on this.