UK government to fully fund apprenticeships for small businesses

From 1 April 2024, the UK government will fully fund the cost of apprenticeship training for 16 to 21 year-olds in small and medium-sized enterprises (SMEs).

Financed by a £60 million investment to enable up to 20,000 more apprenticeships, the decision follows calls by beauty industry bodies to introduce greater incentives for small business owners to engage in apprenticeship programmes and support the retention of staff.

Another apprenticeship measure that has been unveiled is an increase to the funding that employers who pay the apprenticeship levy can pass onto other businesses. From 1 April, large employers who pay the levy will be able to transfer up to 50% of their funds to support SMEs to take on apprentices.

Victoria Brownlie, chief policy officer at the British Beauty Council, attended the SME Business Connect conference in Coventry, where Prime Minister, Rishi Sunak, announced the government measures. She comments:

“The announcement is a real win for our industry as a significant employer of young apprentices. It addresses the concerns we had raised with the government, in terms of where support was lacking when it comes to encouraging small salons and beauty businesses to invest in our future skilled workforce.

“Where continued focus is required however, and this is something we continue to raise, is the need to not lose sight of the importance of investing in older learners – who carry a larger cash burden for businesses. This is vital for reskilling, maintaining a diverse workforce and ensuring we are providing opportunities for all.”

Caroline Larissey, chief executive at the National Hair & Beauty Federation (NHBF), adds:

“I’m pleased to see this announcement responding to our calls for more support for apprenticeships after the gaping hole in the Spring Budget on skills. We hope that this support on training costs will help training providers to go some way to reversing the decline in sector apprenticeship starts.

“We look forward to more details about how the hair and beauty sector will benefit directly. With rising wage costs in April, few businesses are looking to take on staff or apprentices and anecdotally some are even looking at redundancy and reducing staff hours. More flexibility to reallocate the levy is useful, but we also need to find ways of supporting those businesses that prefer apprentices aged 21+ because of the experience and skills they bring.”

Also announced at the conference was the establishment of an ‘Invest in Women Taskforce’, designed to boost private investment in women-led businesses. This responds to the British Beauty Council‘s success in overturning recent rule changes around investor eligibility, which would have disadvantaged women and other underrepresented groups in accessing finance. The Council has requested representation and input into the workplan of the taskforce.

Click here for full details on the government measures.