SMEs looking to increase apprentice uptake, despite red tape concerns

Female Apprentice Engineer Working On Drill In Factory

SMEs are buying into government plans to increase the number of apprenticeships, according to research by the Association of Accounting Technicians.

Two in five small to medium businesses with at least ten employees took on an apprentice during the last year. Some 50% of those surveyed expect to take on at least one new apprentice in the coming year – with nearly half of those (43%) that had an apprentice keeping them on and looking to increase their number.

The survey of 501 business owners with 1-249 employees found some traction among micro-businesses (fewer than ten employees), of whom 16% were looking to take on an apprentice.


Positive news – but concerns persist

It is positive news for the government, which is making a major push to increase the number of apprenticeships. It is looking for three million apprentice starts by 2020; is introducing the National Living Wage; and the apprentice levy.

The levy will be ‘paid’ by all businesses, at 0.5% of their payroll – however an allowance of £15,000 means that it effectively only impacts those with a payroll above £3m.

However, the report does raise concerns among the small and micro- business community about a number of barriers to entry.

One in five suggested less red tape in the process of hiring apprentices; while a quarter wanted to be able to recruit them on a part-time basis. Last month the government issued more guidance on the operation of the levy, but the CBI declared soon after that the levy requires a “radical rethink”.

“The message we are receiving from small businesses is that they need plenty of support and encouragement in order to play their own critical part in bringing more successful apprentices through the system, said Mark Farrar, chief executive of the Association of Accounting Technicians.

“Yet our findings also showed that three quarters of small businesses who have less than ten employees have never taken on an apprentice at all, and therefore are failing to realise the benefits that these individuals – many of whom are keen to learn and hungry for career success – can bring to their company.”

Earlier this month another tax body, the Chartered Institute of Taxation, welcomed further guidance to the treatment of the £15,000 allowance across connected companies.