Our Guest Blog today is from Scott Johnson, Chief Executive of Chas Smith Shopfitters and Commissioner at the UK Commissioner for Employment and Skills
Small businesses are missing out on benefits apprentices bring – but tax breaks could change that...
As we emerge from recession and look for growth, the priority of most small companies is winning new business. Taking on apprentices is a proven and cost-effective way of getting the skilled staff you need to grow the business and service new clients.
Yet many businesses – particularly small ones - remain apprehensive about apprenticeships, with less than one in five likely to take on an apprentice. This is concerning, but perhaps not surprising. As a small business owner myself, I know we're a self-sufficient bunch, reluctant to get on board with the latest well-intentioned but flash-in-the-pan government initiative. In the words of the immortal Frank, we do things our way.
Yet with one in five young people currently unemployed, we're letting a massive pool of potential talent go to waste, as well as creating a simmering timebomb of social problems. Can anything be done to alleviate employers' concerns and help us forge ahead with creating more and better apprenticeships? I think so.
Recommendations to reform the way in which apprenticeships are funded have been made by several groups, including the entrepreneur Doug Richard and the UK Commission for Employment and Skills (UKCES), where I am a Commissioner. This week, the government has launched a public consultation on them, which is available at https://www.gov.uk/government/consultations/apprenticeship-funding-reform-in-england.
One of the options on the table is to shift the funding from providers and colleges to employers via tax relief, provided the apprenticeship is a high quality one. This would mean that as business owners we would be in charge of the funding and therefore become the true customers in the system. In the same way as we think carefully before buying IT kit to make sure it's exactly what we need, businesses will think more carefully about their skills needs. When we are investing our own money into a member of staff – even if some of that money is repaid in the form of a tax break – we will make sure that person swiftly becomes a productive and valuable employee.
Apprentices benefit business, the economy and our society. I believe we have before us an opportunity for employers to help design a system that works and is sustainable. Under this funding reform, businesses of all sizes, but especially SMEs and micro companies, would see that apprentices can work for them. Skills needed to address current skills gaps and meet future demands would be met. And let's not forget the social rewards. Employers would be providing once in a lifetime opportunities for ambitious young people. Apprenticeships provide an alternative route into employment to aspiring, career-orientated individuals, regardless of background.
The government's consultation is open to all. I would urge all business owners interested in the long-term success of their company to take a look.