New apprenticeship funding ‘fair settlement’, says FMB

New apprenticeship funding proposals announced today by the Government look like a ‘fair settlement for small employers’, according to the Federation of Master Builders (FMB).

Under the plans for the levy, the government has proposed that employers that are too small to pay the levy – around 98 per cent of employers in England – will have 90 per cent of the costs of training paid for by the government, reassuring millions of small businesses.

Extra support – worth £2,000 per trainee – will also be available for employers and training providers that take on 16- to 18-year-old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by government.

Brian Berry, FMB Chief Executive, said:

“Small and medium-sized firms do the majority of training in our industry – micro businesses (those employing fewer than ten people) alone train around half of all construction apprentices. It is therefore crucial that new apprenticeship funding arrangements work for these firms and do not impose higher costs on them.”

“The funding arrangements appear to strike a reasonable balance, which takes into account the support that small employers need. Those employers with wage bills of less than £3 million, who will fall beneath the threshold for paying the new Apprenticeship Levy, will be required to pay 10 per cent contributions towards the cost of training and assessment. This means most small employers should not end up paying more towards training costs than they currently do.

Berry warned that many small firms have “expressed nervousness” towards the new digital apprenticeship service, which would see companies negotiate with and paying training providers. He added:

“We strongly welcome the decision not to require small employers to start using the new system until at least 2018. Government and representatives of small employers need to use this time to thoroughly road test the new system and make sure that it fits the needs of the very smallest firms, those we continue to rely on to train the majority of our industry’s workforce.”