From education to employment

Small firms lead calls for £3,000 apprenticeship incentive for under 25s and SMEs

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The Federation of Small Businesses (FSB) is leading calls to introduce the £3,000 apprenticeship incentive for under 25s and small businesses as National Apprenticeship Week launches today (February 6).

This comes as figures from the Department for Education (DfE) show the significant impact of the Government’s increased apprenticeship incentive during the pandemic.

The boost, from £2,000 for young apprentices and £1,500 for older apprentices, to £3,000 for all age groups, led to a 21% surge in apprenticeship starts during the Covid-19 crisis.

But with the reduction back to £1,000 for under 19s and care leavers only, apprenticeship starts plummeted by 12%.

FSB Policy Chair Tina McKenzie said:

“Empowering small employers to attract and retain top talent is a crucial step towards unlocking the full potential of small businesses, leading to improved productivity and sustainable growth.

“Apprenticeships offer a fantastic opportunity to empower young people, but success is contingent on the right support.

“The Government’s increase of the apprenticeship incentive was a welcome effort in supporting young talent during the pandemic, but that funding was temporary, and it has been disheartening to see that commitment fall away.

“The correlation between the drop in apprenticeship starts and the reduction in financial incentives is plain to see.

“As the Chancellor looks to use his March budget to boost labour market participation and growth, he could start in no better place that by using National Apprenticeship Week to announce that he will introduce £3,000 for under 25s and SMEs, which could help unlock long-term, economic benefits for generations to come.

“With FSB figures showing that a third of small businesses recognise skills shortages as a significant hindrance to their growth, the Government must prioritise upskilling the next generation who currently face a very daunting job market.

“As National Apprenticeship Week shines a spotlight on the UK’s young workforce, it is prime opportunity for the Government to revisit its policies by creating a £3,000 apprenticeship incentive that we know made such a difference.”

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