Department for Business, Innovation and Skills

Apprenticeships: Cable guarantees quality, slashes red tape and delivers cash boost for firms

Press Release   •   Nov 16, 2011 15:31 GMT

Business Secretary Vince Cable today announced new measures to ensure more young people benefit from an apprenticeship, and to help employers gain the skilled workers they need to grow.

As part of the Government’s plan for growth, Ministers are taking action to make it easier for companies to take on apprentices, and ensure that the quality of apprenticeships is continually improved. He told businesses in London today that the Government would slash the red tape that can deter hard pressed firms from taking on apprentices, and provide a financial incentive to help the smallest firms recruit their first young apprentices.

The following measures to further strengthen the UK’s world class apprenticeships programme were announced today:

· To encourage thousands of small firms that don’t currently hire apprentices to take on a young apprentice aged 16 to 24, the Government will offer employers with up to 50 employees an incentive payment of up to £1,500. This will support up to 20,000 new apprenticeships in 2012/13. An initial payment will be made two months after the individual has started their apprenticeship; the balance will be paid after the apprenticeship has been completed and the trainee has progressed into sustainable employment.

· Processes will be simplified to make it quicker and easier for employers to take on an apprentice. The National Apprenticeships Service and training providers will be required to ensure that every employer is in a position to advertise a vacancy within one month of deciding to take on an apprentice. Health and safety requirements will be streamlined so that there are no additional demands on employers that already meet national standards.

· There will be a renewed focus on targeting the programme where apprenticeships deliver greatest value - including on younger adults, new employees, higher level qualifications and particular sectors where they can make the greatest impact.

· Apprenticeship providers will be required to offer training in English and Maths up to the standard of a good GCSE (level 2) for all apprenticeships.

A new review into the standards and quality of apprenticeships will be undertaken by a leading employer. Reporting in spring 2012, the review will help ensure Government works effectively with training providers and businesses to continually raise the standards of all apprenticeships, and that training keeps pace with the changing needs of industry.

Business Secretary Vince Cable said:

“The apprenticeships programme is a success story, with record numbers of learners starting an apprenticeship this year. But I have listened to employers, and will go further to ensure that investment is targeted where impact is greatest, delivering the specific skills businesses need to drive growth.

“Apprenticeships are proven to boost the life chances of young people, and are a sound investment in our future competitiveness. So when times are tough, it’s right that we provide additional support to help the smallest firms meet training costs.

“We’ll cut no corners on quality. Apprenticeships will remain the gold standard for excellence in vocational training – but where red tape serves no purpose, we’ll strip it away.”

Skills Minister John Hayes said:

“By reviving apprenticeships, this Government is helping thousands of people discover the purposeful pride that builds successful careers, thriving firms and strong communities. By continuing to drive up standards and reaching out to small businesses, we'll create a culture in which values, drives and rewards vocational excellence and fuels economic and social progress.”

Research shows that every pound of public investment in an apprenticeship generates up to £40 for the wider economy; improvements in productivity ensure employers recoup their training costs within three years; and an advanced apprenticeship boosts an employee’s lifetime earnings by around £100,000. But some smaller firms have been deterred from hiring an apprentice due to perceived logistical, training and administrative costs.

Attendees at today’s Apprenticeships Summit, held at BIS, included Bentley Motors, SEC Recruitment and Kesslers International.

Dr Adam Marshall, Director of Policy at the British Chambers of Commerce said:

“Businesses do see the benefit of apprenticeships. For many business owners they are a critical way to train up young people and adults that then help grow their firms. However, smaller companies often shy away from taking on apprentices. They worry about the initial costs involved, the skill levels of candidates, and the potential risks to their business, particularly at a time when employing people is tough due to worries about the economy.

“For some time we have been telling ministers that small firms must be incentivised to take on apprentices, so we welcome the government’s moves to strip away some of the obstacles that have made it hard for smaller firms to get engaged. Health and safety constraints, inflexible teaching frameworks, and high upfront costs often deter companies from taking on apprentices. By reducing red tape, and incentivising firms to take the plunge, the government is offering real help to firms and apprentices alike. An external review of apprenticeship standards and frameworks is a positive step, and will be critical to making apprenticeships flexible and relevant to employers across the country.”

John Walker, National Chairman, Federation of Small Businesses, said:

“We very much welcome the action the Government is taking on apprenticeships. In particular it is good news that businesses will receive an incentive payment to take help them with the demands of taking on an apprentice. A third of businesses responding to an FSB survey said this would encourage them to take an apprentice on and a rebalancing of current funding to provide this is something we have called for, for some time. With youth unemployment reaching almost a million, initiatives like this will help the smallest of firms to take on young people. Nevertheless there remains a need for a continued focus on helping small businesses take on apprentices and the barriers they face in doing so.”

Today’s announcements are part of the government’s growth review. Building on the programme of reforms set out in the first Plan for Growth, the next stage of the review is focusing on education and skills, infrastructure, logistics, mid-sized businesses, rural economy and open data. More details and actions will be announced later this month.