Education and Business Leaders Urge Government to Back SME Apprenticeships to Boost Growth and Youth Opportunity

In advance of Small Business Saturday, A coalition of leading education, skills, and business organisations has issued an open letter to the Secretary of State for Work and Pensions, Rt Hon Pat McFadden MP, calling for urgent government action to help small and medium-sized enterprises (SMEs) take on more apprentices and drive economic renewal across the UK.

The letter, coordinated by the Edge Foundation as part of its Apprenticeships Work campaign, warns that SME participation in apprenticeships has “declined markedly” since the Apprenticeship Levy was introduced, despite SMEs employing 60% of the UK workforce and playing a critical role in supporting young people into work.

Against a backdrop of sluggish productivity, rising skills shortages, and a cost-of-living squeeze affecting employers and families, the signatories argue that revitalising SME apprenticeships is a vital lever for national growth. Alice Gardner, CEO of the Edge Foundation, said:

“SMEs are the backbone of the UK economy and the heart of our communities. When SMEs thrive, local economies thrive — and so do young people. But the current apprenticeship system is not working for smaller businesses. Without decisive action, we risk losing entry-level pathways at the very moment the country needs them most.”

A Call for Practical, Targeted Reform

The coalition urges the Government to introduce five key measures to reverse the decline in SME apprenticeship starts:

1. Fund and expand national SME apprenticeship brokerage services, providing consistent, high-quality support to help small businesses navigate the system.
2. Protect and enhance financial incentives, including consideration of the Federation of Small Businesses’ proposed £3,000 incentive for employers hiring under-25s.
3. Ringfence dedicated funding for SMEs within the forthcoming Growth and Skills Levy, safeguarding opportunities for young people at levels 2 and 3.
4. Set clear national targets for SME apprenticeship growth, recognising SMEs as central to the skills system.
5. Strengthen SME representation in the design and development of apprenticeship standards.

Signatories include CEOs, Directors, and senior leaders from major employer groups, training organisations, and national networks — from the Federation of Small Businesses and Logistics UK, to Specsavers, the Co-Op Group, the Association of Apprentices, the Chartered Management Institute, and multiple apprenticeship hubs across England.

To read the letter in full and the list of signatories, here