The Federation of Small Businesses (FSB) is calling on the Government to increase incentives for small firms to take on apprentices.
Ahead of today's (Friday) announcement on future apprentice funding, the FSB has said that small business is critical to achieving the Government's target of reaching three million new apprentices by 2020 but will need more support to do so.
In its report, Make or Break: Getting apprenticeship reform right for small businesses, the FSB found that one in four of its 2,000 members employ an apprentice, with a further 24% considering taking one on in the future.
However, the FSB warned that these figures are likely to fall if there was a change which required small businesses to contribute towards the cost of training an apprentice. It called on the Government to improve its small business employer incentive.
Chairman Mike Cherry said: "We are at a make-or-break moment. We need the Government to hit the right balance between incentives and support. While many small firms are committed to apprenticeships, many more continue to be worried about the time and personal commitment required.
"Ministers need to focus on three main areas: more targeted and localised information for businesses with high growth potential, specific and practical guidance on how a smaller company can take on an apprentice, and a more generous package of incentives and support for those which do. Getting this right is key to the successful reform of the apprenticeship system."
Among its recommendations, the FSB suggested that the government set up a group of 100 small businesses to contribute to apprenticeship policy.
Annette Allmark, director of strategic policy at People 1st, said that the new hospitality apprenticeship standards, developed by employers, including consultation with groups such as the SME consortium, presented businesses with a huge opportunity to raise professionalism and demonstrate the career pathways the industry has to offer.
She added: "Small and medium hospitality businesses are already the largest users of apprenticeships in the industry, estimated to account for over 75% of apprenticeship starts each year, but there is a significant potential to increase this number further. Today the Government will announce how apprenticeships will be funded in the future and we're hoping to see a good financial incentive to help SMEs with the cost of apprenticeships, as with the right training support, we know that they are a fantastic skills solution for businesses."
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