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Denham announces £350m to support small businesses

DEPARTMENT FOR INNOVATION, UNIVERSITIES AND SKILLS News Release (064/2008) issued by COI News Distribution Service. 21 October 2008

Skills Secretary John Denham announced that small businesses will be the focus of £350 million of Government funds to help them train their staff. The Government's approach will be reshaped and money will be available to deliver a new package of support to help small businesses get through the tougher economic climate by building the skills and expertise of their workers.

It will deliver funding for training, with the minimum level of bureaucracy or delay. This will be for subjects such as business improvement techniques or leadership and management, which are proven to provide skills to increase the productivity of individuals and firms. John Denham said:

"Small businesses are an important engine of our economy and we must make sure that we support them during tough economic times.

"We are overhauling the training system to make sure that they can get help with training their staff with the very minimum of bureaucracy.

"We know that firms which invest in skills do better than those that don't, which is why we will be urging small businesses to take up this offer from Government."

The funding to support training will be drawn from the Government's 'Train to Gain' programme - the scheme that supports and subsidises staff training. Funding for the programme is planned to rise to £1 billion by 2010-11. In allocating the planned increase in spending on this programme over the next two years, the Government will give top priority to meeting demand from small businesses in the private sector (those with up to 250 employees).

The key elements of the £350m Train to Gain package are:

* Relaxing the rules to allow funding for "bite-sized chunks" - small units or modules of qualifications in subjects known to be important to SMEs, such as business improvement, team-working, customer service, and risk management;

* Help for groups of SMEs located together in business parks so that they can increase their purchasing power and share resources to support the training of local SME staff;

* Extending DIUS's successful leadership and management programme so that more SMEs can benefit from it, including in companies with just 5-10 workers;

* Relaxing the rules to allow workers to get training up to level 2 even if they already have a previous qualification at this level; and more funding for level 3 training;

* Brokers to offer tried and tested skills diagnostics and audits so companies can have their training needs more accurately identified; and point SMEs to the right solutions from the most appropriate providers;

* A new communications campaign to begin next month to underline the benefits of upskilling and reskilling and the breadth of the support on offer from Government.

Notes to editors

1. Eligibility

Only private sector SMEs (i.e. with up to 250 employees) will be able to access the new flexibilities described below.

For these purposes, all publicly funded organisations - i.e. Government Departments, Agencies, NDPBs, the Health Service and Local Government organisations - will be classed as being in the public sector - and so will not be eligible for this extended offer through Train to Gain.

2. Flexibility on 'firstness'

Eligible employers will be able to access training through Train to Gain for their employees, regardless of whether those employees already hold a first qualification at that level.

That is to say, there will be no requirement or expectation placed on providers for all or a proportion of the training programmes delivered to be 'first' qualifications at that level for the employees concerned.

3. Flexibility in relation to 'fullness'

Eligible employers will be able to access units from the QCF in a list of business critical areas that will include business improvement techniques, business systems/processes, teamworking/communications, customer service, new product design, finance and credit, cashflow and profit management, and risk management.

The employer/employee will not have to commit to a programme of learning that will lead to the acquisition of a full qualification to access these units.

Unaccredited training will not be eligible.

As now, where there is a statutory requirement in place for employers to ensure that their employees receive certain training, e.g. Health and Safety, they will not be able to access public funding for that training.

4. Brokerage / diagnostic support

Train to Gain skills brokers, and from April 2009 Business Link brokers, will continue to work with employers to help them identify their skills needs at all levels - through an initial Training Needs Analysis - and then help them identify the providers that are best placed to meet their needs.

Brokers will be asked to focus their efforts on engaging eligible SMEs. As now, employers will be able to work direct with a provider to assess and address their skills needs; where they do that, they will be able to access this enhanced package of support.