Apprenticeships: Temps and Small Businesses Unable to Benefit

Apprenticeships in the UK are currently on rocky ground. The government target of having 3 million apprenticeships up and running by 2020 is already way off track, and is unlikely to be reached at all according to the Institute for Apprenticeships (IfA).Another blow has come in recent weeks, as Anthony Impey, the chair for skills policy and apprenticeships at the National Federation of Self Employed & Small Businesses (FSB) has called for reform of the system, claiming it’s currently unworkable for small businesses.

Add to this the recent comments from Neil Carberry, Chief Executive of the Recruitment & Employment Confederation (REC), who also called for reform due to the way temporary workers are essentially barred from apprenticeships altogether, and it’s clear there are some serious underlying issues with the way the scheme is working.

2017 Reforms Throttling Small Business

Impey states that the 2017 reforms are one of the major issues for smaller businesses. These reforms were brought in in order to make the 3 million apprenticeship goal achievable, with the aim of plugging the skill gaps that currently exist. The problem is that not only are numbers falling for apprenticeship enrollment in general, it’s extremely difficult for smaller businesses to support and fund what few employees are applying for level 2 and 3 apprenticeships.

While small businesses can receive discounts and support on apprenticeships, including up to 90% of training costs paid, most of this support is only sustainable if employees are studying for a level 1 apprenticeship and aged between 16-18. A level 1 apprenticeship tends to last around a year, which with government support, can be sustainable for smaller businesses. Level 2 and 3 qualifications are much longer, however, with some high level apprenticeships requiring up to four years of study. The difficulty for small businesses comes from the fact that apprentices must meet a 20% off the job training requirement, which can significantly impact business in the long term due to employee availability.

There is a system in place designed to help small business however – Larger employers and public sector bodies can use some of their levy requirement to instead support smaller businesses in their supply chain. The problem with this, according to Impey, is that they are not always received when needed. What’s more, smaller businesses find it much harder to match the buying power of larger employers when it comes to training provision.

Temp Worker Woes

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation,agrees the current apprenticeship system needs reviewing:

‘Keeping support in place for apprenticeships matters, but we must end the scandal of locking temporary workers out of the system.’

Currently, the apprenticeship scheme makes it impossible for temporary workers to get on board. There are a number of reasons for this, including the fact that any apprenticeship support requires that an employee must work for an employer for a minimum of 12 months before being eligible for levy funding.

Another issue is, again, the requirement for 20% of working hours to be spent on off the job training. This jeopardises temp workers’ positions, given that employers often hire temps to help handle periods of high work volume. It’s a compromise employers aren’t willing to take due to the financial implications, and one that workers don’t want to risk their contract over.

Furthermore recruiters are often required to pay a levy given their size, but are unable to use any of the levy money on training agency workers. This leaves agencies with wasted levy money, and means workers can’t afford to get any qualifications, despite the money being there to help.

Future Changes

While the REC is lobbying the government for reform that allows shorter courses to be taken using the apprenticeship levy, any changes to address the problems facing temporary workers and small businesses currently seem unlikely. For now at least, the apprenticeship system will continue to exclude those that arguably need it the most – small businesses, and employees looking to improve their employment prospects and qualifications.