Cable pledges to slash red tape for apprenticeships

Posted on 16 Nov 2011

The Government has announced new measures to increase the uptake and effectiveness of apprenticeships, which includes cutting red tape to help companies acquire apprentices more quickly.


Business Secretary Vince Cable introduced the measures as figures released today show youth unemployment topping one million.

Reforms include a financial incentive of £1,500 and the slashing of red tape in order to make it easier for smallest manufacturers to take on apprenticeships.

Cable said: “I have listened to employers, and will go further to ensure that investment is targeted where impact is greatest, delivering the specific skills businesses need to drive growth. Apprenticeships are proven to boost the life chances of young people, and are a sound investment in our future competitiveness. When times are tough, it’s right that we provide additional support to help the smallest firms meet training costs.”

Firms with up to 50 employees that take on an apprentice are to be paid a small amount after the first two months of the programme, and then the full £1,500 once the employee moves into ‘sustainable employment’ at the company.

The Government claims that this will support up to 20,000 new apprenticeships in 2012/13.

The actual processes smallest UK manufacturers must undergo to employ apprentices are to be streamlined. The National Apprenticeships Service and training providers will be obliged to ensure small firms are able to advertise for an apprentice within one month of a position becoming available. Health and safety requirements will also be changed so that “there are no additional demands on employers that already meet national standards.”

Chief executive of EEF Terry Scuoler welcomed the reforms and the cuts to bureaucracy, but warned that attention must also be paid to medium sized businesses.

“We must now build on this with a concerted effort to give employers greater control over their investment in apprentices and ensure that providers and qualifications are responding to their needs,” he said.

Skills Minister John Hayes argued for the importance of apprenticeships: “Research shows that every pound of public investment in an apprenticeship generates up to £40 for the wider economy; improvements in productivity ensure employers recoup their training costs within three years; and an advanced apprenticeship boosts an employee’s lifetime earnings by around £100,000.”

Susan Anderson, CBI director for education and skills, said: “At a time of record high youth unemployment, the introduction of a £1,500 incentive payment to small companies which take on young people is welcome news, but this should go further to include employers of any size.”

“The government must reduce the bureaucracy around taking on new employees, especially regarding audit, inspection and data collection, so that the incentive payment does not get eaten up by these costs,” she added.

Philip Whiteman, chief executive of manufacturing skills provider Semta, also commented: “Small and medium-sized enterprises make up the vast majority of the strategically important manufacturing and engineering sectors and while apprenticeship training is fully funded for those aged 16-18, and the payback is estimated to be between two and three years. Cost can be a barrier to hiring apprentices in the current economic climate.”

George Archer and Tom Moore