Zarah ChoudharyThe Federation of Small Businesses (FSB) has called on the Government to reinstate a £3,000 financial incentive for small businesses hiring apprentices under the age of 25.
Nearly half of small employers (47%) said this would encourage them to take on apprentices.
Among small firms that already employed apprentices, 73% said the increased financial support could enable them to hire more in the future.
The report came as part of the FSB’s response to National Apprenticeship Week in England, which begins today (Monday 10th February).
At present, employers receive a £1,000 payment when they hire an apprentice under 19.
The business group urged the Government to use the upcoming Spending Review in the summer to raise this to £3,000, exclusively for small and medium-sized enterprises (SMEs).
Alongside financial support, administrative challenges were also identified as a barrier to small businesses taking on apprentices.
The FSB found that 36% of small employers that currently employ apprentices believe reducing paperwork and bureaucracy would encourage them to take on more.
The organisation called for a standardised system to track both on-the-job and off-the-job training, arguing that the current approach, which varies across apprenticeship providers, creates additional work for businesses.
Government statistics indicated that while overall apprenticeship starts have risen, there has been a decline in lower-level apprenticeships, which are traditionally taken up by smaller firms.
The FSB said more action is needed to address this trend and urged the Government to set clear targets to increase the number of apprenticeship starts in small businesses over the course of this Parliament.
Tina McKenzie, policy chair at FSB, said: “National Apprenticeship Week is a great opportunity to shine a light on all the fantastic small businesses out there that currently employ apprentices – nurturing their skills, while at the same time growing their business.
“Our members who employ apprentices often tell us how they help fill skills gaps in their team, and also bring in fresh new ideas.
“We’d love to see the starts numbers increasing and more small firms taking on apprentices, particularly at the entry-level.
“Our research shows what a difference bringing back the £3,000 incentive, which was briefly introduced during the pandemic, would make to the numbers.
“The Government has an opportunity to make a difference on this at the Spending Review in June.
“With so many struggling with the admin side of taking on an apprentice, it’s clear time and resources are in short supply for small businesses, most of which don’t have a separate HR team.
“Providing financial incentives would help to offset this.”
