Prime Minister to announce major reform package to boost apprenticeships and cut red tape for thousands of small businesses.
In his first economic speech since the Spring Budget, the Prime Minister is expected to set out a major package of reforms to support businesses to deliver more apprenticeship places, cut red tape for SMEs and leverage more private investment in female founders at the Business Connect conference in Warwickshire today [Monday 18th March].
Key areas in the speech include:
- Major package of reforms to support small businesses in PM’s first economic speech since the Spring Budget
- £60 million new investment to enable up to 20,000 more apprenticeships, including for young people and small businesses
- Unnecessary regulatory burdens to be slashed through Brexit freedoms saving around £150 million per year for thousands of small businesses
- New taskforce to be established to boost private investment in women-led businesses and make the UK the best place in the world to be a female founder
The Government will fully fund apprenticeships in small businesses from 1st April by paying the full cost of training for anyone up to the age of 21 – reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.
This will remove the need for small employers to meet some of the cost of training and saves time and costs for providers like further education colleges who currently need to source funding separately from the government and businesses.
The move is underpinned by an additional £60 million of new government funding for next year, guaranteeing that where there is demand for apprenticeships from businesses, the government will ensure there is enough funding to deliver them.
From the start of April, the government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses. Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer.
Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices. This will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people in a huge range of sectors, industries, and professions.
Hundreds of large levy-paying employers have already taken advantage of the opportunity to transfer their unused levy funds to other businesses. As of [December 2023], 530 employers including ASDA, HomeServe and BT Group have pledged to transfer over £35.39 million to support apprenticeships in businesses of all sizes since September 2021.
Taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people, and is part of our plan to build a stronger economy and deliver a brighter future where hard work is rewarded and young people get the skills they need to succeed in life.
This also builds on our record of transforming apprenticeships over the last decade. Since 2010, we’ve helped 5.7 million people start an apprenticeship, working with employers to develop almost 700 new high-quality standards and increasing the funding for apprenticeships to over £2.7 billion from next year.
Prime Minister Rishi Sunak said: “Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
“Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.
“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”
Dorchester Chamber for Business President added: Our members welcome any assistance from government to remove red tape and make taking on an apprentice more straightforward. However there remains a huge tax burden on small businesses, as the lifeblood of British business more needs to be done to drive the small and start up business economy.”
This is the third Business Connect conference to take place since it was launched by the Prime Minister last year and is expected to convene over 150 SMEs, as well as government ministers to discuss how we can further support businesses to grow and thrive in the UK.
The Prime Minister is also expected to announce further deregulatory measures to simplify both non-financial and financial reporting for SMEs which is expected to save thousands of businesses across the UK around £150 million per year.
This includes increasing the number of companies which qualify as a smaller or medium sized business through a 50% uplift to the thresholds that determine a company’s size. This is expected to benefit up to 132,000 businesses who will be spared from burdensome form-filling and non-financial reporting requirements.
The existing onerous and outdated thresholds were previously set by the EU, but our Brexit freedoms mean we can now raise the thresholds to ensure they’re more proportionate and better reflect the needs of British businesses. This has also allowed us to go further than the EU, who recently raised its thresholds by 25%.
We are also removing several duplicative and bureaucratic EU reporting requirements, including for what companies must set out in their annual reports, whilst also making it easier for companies to share digitalised annual reports rather than paper copies – ensuring businesses practices are fit for the modern age.
Taken together, these changes are expected to deliver around £150 million of savings for SMEs per year and save small businesses at least 1 million hours per year in total.
The Government will also consult on further changes later this year including exempting medium-sized companies from producing strategic reports, which could save them a further £148 million a year and raising the employee size threshold from 250 to 500 employees, which will mean around 1,000 more large companies could become SMEs.
Secretary of State for Business and Trade Kemi Badenoch said: “Almost every job in the UK is owed to what is, or what previously was, an SME. They are the engines of economic growth for this country.
“Whether it’s through cutting red tape, unlocking investment or lowering business costs, today’s announcements show that this government is committed to doing all it can to turbo-charge SMEs so that they can go further and faster than ever before.”
Speaking directly to businesses and delegates at the event, the Prime Minister will underline the government’s plan to create the economic conditions to encourage entrepreneurship and drive growth. As part of this, the Prime Minister is expected to announce a new industry led Invest in Women Taskforce to unlock private investment in female business leaders and make the UK the best place in the world to be a female founder.
For too long, innovative, women-led start-ups have been held back due to a lack of finance and the proportion of equity capital investment going to all-female founder teams has been stuck at around 2% in the UK for the past decade.
The core aim of the Taskforce is to raise a bespoke funding pot for female-founded businesses through private capital and address the wider challenges that female entrepreneurs specifically face to help unlock their potential to establish and grow their enterprises.
The new taskforce will be industry led and co-chaired by entrepreneur Debbie Wosskow and Barclay’s Hannah Bernard, with Small Business Minister, Kevin Hollinrake, representing the government. The membership of the taskforce will be set out in due course.
Read the full press release here: Prime Minister to announce major reform package to boost apprenticeships and cut red tape for thousands of small businesses – GOV.UK (www.gov.uk)
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