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The Government will increase awareness among small and medium enterprises (SMEs) of the benefits of apprenticeships, and make support for small businesses taking on apprentices simpler and more accessible, thanks to a report from jeweller and social entrepreneur Jason Holt, published today.

The Education and Business Secretaries commissioned Mr Holt’s report in February to advise them on what more could be done to help SMEs take on apprentices. Drawing on his discussions with small firms, Jason Holt points to a lack of awareness among small businesses about the benefits of taking on apprentices and how to recruit and train them.

In response, the Skills Minister John Hayes today welcomed the findings, and outlined new measures to help SMEs take on apprentices. These were announced during a visit to PK Automotive in Lincoln to congratulate the company on taking on their first apprentices.

New measures announced today will see the Government:

· Work with the people that SMEs look to for advice, including lawyers and accountants, to promote apprenticeships to their SME customers

· Enable SMEs to get their apprentices the training they need, by providing better information on availability and investigating how to give them a greater say in developing the skills they need

· Improve the performance of providers of training to SMEs by agreeing standards and the consequences of not meeting them

· Improve the Apprenticeship Grant for Employers by making it simpler and more accessible to more employers.

PK Automotive is being awarded a £1,500 grant per apprentice as part of the Government’s Apprenticeship Grant for Employers. This is providing up to 40,000 grants to encourage smaller employers to take on new young apprentices.

On publication of his report, Mr Holt said:

“Whilst apprenticeships offer undoubted growth opportunities for businesses, not enough SMEs are taking advantage. This is because they have an outdated view of apprenticeships, are often in the dark, and frequently do not receive the specific training provision their apprentices need. My recommendations are intended to address these issues with Government, employers and providers all playing a part.”

Education Secretary Michael Gove said:

“I am very grateful to Jason Holt for the considerable time and effort he has devoted to producing his report. He is certainly right that we need to give employers, and not training providers, the power and freedom to shape their apprenticeships, and make the process as simple as possible for every employer.

“Jason has raised important issues for us to consider - we can and must go even further, to strip out bureaucracy and to ensure quality.”

Business Secretary Vince Cable said:

“Only a small minority of SMEs currently employ apprentices. Many of the rest are missing out on an effective way of growing and up-skilling their businesses.

“We hope that the measures announced today will make a difference by raising awareness of the benefits of apprenticeships amongst SMEs and making it as easy as possible for these businesses to take on an apprentice”.

Mr Hayes said:

“Jason’s experiences as an entrepreneur and training provider have enabled him to get to the root of what is getting in the way of small businesses accessing the benefits that apprentices can offer.

“Jason’s work will really help us to help SMEs improve productivity and build a better-skilled and dedicated workforce.”

Owner of PK Automotive Paul Killingsworth said:

“My apprentices, along with my trained technicians are an investment in the development and future of my business.”


Notes to editors:

1. A copy of Jason Holt’s full report can be found at: http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/m/12-891-making-apprenticeships-more-accessible-to-smes-holt-review

2. Government response to the Holt Review

Jason Holt’s Review follows on from the Education and Skills Growth Review last November, when the Government committed to inviting a leading SME employer to advise on what further measures could be taken to give SME employers more control in the system.

Mr Holt is CEO of Holts Group of Companies. The Group incorporates Holts (a jewellery retailer and gemstone wholesaler), Jewellery Innovations (a jewellery manufacturer), Holition (a Shoreditch-based creative marketing agency using emerging technologies) and Holts Academy of Jewellery.

The Government’s response to his recommendations is detailed below:

Communication: raising awareness of the benefits of apprentices

The Government agrees that more consistent messaging on Apprenticeships is needed to provide greater clarity to - and generate more interest amongst - SMEs. With overall responsibility for programme delivery, the National Apprenticeship Service (NAS) already has a pro-active marketing policy, and will work to share its products with other organisations to use. The Government also agrees that, to disseminate such messages, better use needs to be made of those intermediaries to whom SMEs really listen, and it will work to facilitate this (Recommendations 1 & 2).

The Government agrees that more needs to be done to improve awareness of Apprenticeships amongst young people, raise their status, and ensure young people and their parents have access to good information about the choices available to them. Whilst we welcome the specific suggestions made by Mr Holt on this issue, we believe that it should be up to schools, together with local partners including employers, to determine how best to address this challenge (Recommendations 3, 4 & 5).

Empowerment: SMEs to get the best from their training providers

The Government agrees that we need to ensure that SMEs get the training provision their apprentices really need. As proposed by Mr Holt, the Government will therefore look at ways to enable SMEs to have a greater say in developing appropriate training provision; continue to promote employer-focused training models such as Group Training Associations (GTAs); subject to scoping and affordability, support the development of an online tool (incorporating a feedback mechanism) to enable employers, including SMEs, to identify appropriate training provision in real time; and consider the merits and viability of weighting funding where the cost of training provision to micro and small companies is higher (Recommendations 6, 7 & 8).

The Government agrees that greater transparency over funding will encourage SMEs to act as informed purchasers of the training they receive. The Government will therefore investigate how information on the Government contribution to the cost of training their apprentices can be provided to employers without imposing significant new burdens on any organisations (Recommendation 9).

The Government agrees that, to drive improvements in the service training providers offer to SMEs, and to empower SMEs to make informed decisions over which providers to use, clarity is needed within the sector on what standards are expected of training providers and the consequences of not meeting them. The Government will therefore consider further how these standards can be agreed, communicated, and used to drive up provider service to SMEs (Recommendation 10).

Simplification: ownership and responsibility for Apprenticeships and removing barriers

The Government agrees that all Government Departments and agencies with an interest in Apprenticeships need to work together to ensure that the delivery of the Apprenticeship programme is optimal. We will use the forthcoming change in status of the SFA and NAS as an opportunity to review roles and accountabilities and ensure these are clear and optimal to supporting apprenticeships (Recommendation 11).

Subject to scoping and affordability, the Government agrees that SMEs should have the option of arranging for an “Apprenticeship vacancy pending approval” notification to be placed on the Apprenticeship Vacancies (AV) site in advance of a full advert, and that efforts to speed up the overall process of getting an advert on the system should be redoubled (Recommendation 12).

The Government accepts that some potential apprentices may need additional support to prepare them to undertake an apprenticeship, and supports a wide range of provision to help young people develop the skills they will need to successfully compete for and commence an apprenticeship. The range of provision on offer is designed to meet the varying needs of young people, and the Government therefore does not believe that existing schemes need rationalising. It will however continue to evaluate the effectiveness of this provision, identify and address any emerging gaps, and ensure the range of options is well communicated. For example, the Government is particularly aware of a gap in provision for unemployed young adults with very low skill levels and no experience of work. It will therefore be piloting a new traineeship to give them the basic skills and work experience to compete for Apprenticeships (Recommendation 13).

The Government agrees that SME employers themselves have a key role to play in championing the programme and in mentoring and supporting other SME employers who are new to Apprenticeships, and will look for opportunities to further support and encourage SME networks to deliver this (Recommendation 14).

In addition to the revisions being made to the Apprenticeship Grant for Employers (AGE) outlined below, the Government agrees to review other options for incentivising and supporting employers to take on and train apprentices (Recommendation 15).

In addition to these specific actions arising from Mr Holt’s Report, his evidence, analysis and recommendations will now help to inform the ongoing independent review into the future of Apprenticeships being led by Doug Richard: http://www.bis.gov.uk/policies/further-education-skills/apprenticeships/richard-review.

3. Revisions to the Apprenticeship Grant for Employers

The Apprenticeship Grant for Employers (AGE) provides up to 40,000 grants of £1500 to encourage and support employers taking on a young apprentice aged 16 to 24. Following feedback from employers, the Government is refining the AGE scheme to make it simpler to use and expand access to the scheme. The grant will be made in a single payment instead of two instalments and employers will be allowed to claim grants to support up to ten new apprentices. Eligibility restrictions will be revised, opening the scheme to employers that have not employed an apprentice in the previous 12 months.

In addition, medium sized firms will continue to be eligible to claim the grant if they expand beyond 250 employees, as the scheme will now be open to employers with up to 1,000 employees. However, SMEs remain a key priority for the scheme and sufficient funding is available to ensure that all eligible SMEs will be able to claim the grant.

4. Other reforms

The Government has already taken a number of steps to help small companies recruit apprentices, including reducing the burden on training providers and employers by removing all health and safety requirements that go beyond what health and safety legislation demands, and establishing a dedicated Small Business Team within NAS providing a bespoke service to employers with fewer than 250 employees.

In addition, from this month, micro companies may agree with their training provider to add one or two broader business skills units per new apprentice in areas including Business Administration, Finance, Accounting, Law and Human Resource Management which are all available at levels 2, 3, 4 and 5. This additional support recognises that apprentices working in the smallest businesses are often required to work in a wider range of functions. Full details are available from NAS.

5. PK Automotive

PK Automotive Solutions is an independent automotive service and repair centre. They employ seven staff, including two apprentices they have recently taken on with the help of the Apprenticeship Grant for Employers (AGE) 16-24.

6. Business in You

This year the Government is running the Business in You campaign to inspire more people to start or grow their business backed by a range of existing business support services provided by the public and private sectors. More information is available at www.businessinyou.bis.gov.uk.

7. BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

8. The Government's economic policy objective is to achieve 'strong, sustainable and balanced growth that is more evenly shared across the country and between industries.' It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
• To create the most competitive tax system in the G20
• To make the UK the best place in Europe to start, finance and grow a business
• To encourage investment and exports as a route to a more balanced economy
• To create a more educated workforce that is the most flexible in Europe.
Work is underway across Government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the Government wants the economy to travel.

Notes to Editors

Contact Information

Name

Caroline Holmes

Job Title

Division

Department for Business, Innovation & Skills

Phone

020 215 5979

Fax

Mobile

Email

caroline.holmes@bis.gsi.gov.uk

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