How will protecting the term ‘apprenticeship’ affect UK businesses?

The Department for Business, Innovation and Skills (BIS) has released an impact assessment document which summarises the effects of protecting the term ‘apprenticeship’ on UK businesses.

 

Protecting the term

With the government committing itself to creating 3m apprenticeships by 2020, training providers may seek out to benefit from this by ‘‘claiming to offer an apprenticeship or apprenticeship related training that is not of the same quality as a Government apprenticeship.’’

The newly released Enterprise Bill includes a measure to prevent people passing off poor quality training schemes as ‘apprenticeships’.

Through strengthening and protecting the term ‘apprenticeship’, it may incur a small cost to UK businesses that need to become compliant with the government’s new rules.

 

Costs/Benefits to UK businesses

The potential costs to businesses include:

  • Red Tape – BIS assumes that ‘‘between 1 and 3 hours of one member of staff’s time would be required to replace or remove the term ‘apprenticeship’ from company material.’’
  • Removal of funds ­– In order to replace or remove the term ‘apprenticeship’, businesses may require an administrative employee, with an hourly wage of £10.17 to carry out the work. In the upper bound, BIS estimates that it would be carried out by a manager or director – more likely in a smaller business – with an hourly wage of £20.61. This total costs to UK businesses could reach £60,000.

The potential benefits to UK businesses include:

  • Increase in reputation – BIS has found that reputational benefits associated with the apprenticeships ‘brand’ could improve compliant businesses’ ability to attract additional custom.
  • Apprentices could earn more money – Learners could also benefit if the apprenticeship qualification carries more weight with employers due to a more secure reputation. This could be observed through higher wage returns.