The ECA has been completely overwhelmed by the strength of responses from its members, and those of partner industry bodies, who may no longer be able to train the next generation of apprentices if proposals under the Government’s Apprenticeship Funding Reform Technical consultation go ahead.The Government consultation proposes that apprenticeship funding be routed directly to employers; however the changes would ask for companies to pay the apprenticeship training costs upfront and be reimbursed later via the PAYE system or via an apprenticeship credit. This could impact greatly on cash flow, putting apprenticeships out of reach to many small to medium companies.
Diane Johnson, ECA Skills Ambassador and electrical contractor said of the proposals: “I’ve stressed many times that we already have a skills crisis in our industry and this could tip us and other skilled industries vital to our economy over the brink.
“Where is our homegrown talent going to come from and who will be the UK’s future captains of industry if, before any of us can even consider taking on apprentices we have to jump through a series of hoops. Not only will we have to source our own training, negotiate the price and take on all the bureaucratic load; but we will have to worry about finding the cash to pay upfront while trying to run a business following a deep recession. Who has that kind of time? It’s a ticking time bomb. And with this latest erosion, I fear that the ticking will stop and one almighty bang will follow.”
ECA’s survey gained its members’ views of the consultation, with nearly 800 SMEs expressed deep concerns:
- 94% fear that the reduction in the Government’s contribution to the cost of an apprentice’s training will lead to their company taking on no apprentices or fewer apprentices in the future
- 90% are opposed to any cut in Government support for SMEs
- 95% feel that the funding proposals will adversely impact on the cash flow of small businesse
- 95% consider that the proposed system will result in increased bureaucracy for employers
Johnson concluded: “Let’s not forget that SMEs make up nearly half of all employers in the UK, and already they carry much of the burden of training. Apprentices are the absolute lifeblood of our skilled industries. We believe that other sectors, such as construction and automotive have voiced similar concerns and I worry that any additional disincentive that makes employers further withdraw from training will damage our future skills base. If this happens, who exactly are going to be our future captains of industry? ”
To access the final report, please click here.