Fit for the future: making the apprenticeship system work for small businesses

Prior to the May 2017 apprenticeship reforms, the UK Government acknowledged 'significant scope for growing apprenticeships' among smaller employers to reach its target of three million apprenticeships between 1 May 2015 and 31 March 2020. However, research commissioned by the Government in 2017 [report available in VOCEDplus at TD/TNC 130.672] found that the reforms may be less successful at engaging smaller employers with apprenticeships and 'may threaten existing provision'. The new levy-based funding system with elements such as co-investment came into effect on 1 May 2017. The...  [+] Show more

Prior to the May 2017 apprenticeship reforms, the UK Government acknowledged 'significant scope for growing apprenticeships' among smaller employers to reach its target of three million apprenticeships between 1 May 2015 and 31 March 2020. However, research commissioned by the Government in 2017 [report available in VOCEDplus at TD/TNC 130.672] found that the reforms may be less successful at engaging smaller employers with apprenticeships and 'may threaten existing provision'. The new levy-based funding system with elements such as co-investment came into effect on 1 May 2017. The reforms, resulted in a sharp reduction in the number of apprenticeship starts overall, including in small businesses.

This report examines the impact of the May 2017 reforms on Federation of Small Businesses (FSB) members to assess whether small businesses have indeed scaled-back or withdrawn their offering altogether. This report is broadly divided into four main sections. The first part explores the current state of apprenticeships in small businesses looking at the level, age and diversity of apprenticeships. The second section identifies the main challenges smaller firms experience under the existing system. It analyses the costs and benefits of employing apprentices and whether, under the current arrangements, apprenticeships are still an attractive business proposition for small businesses. The third section reviews the challenges with training and assessment provision, investigating the range of difficulties smaller employers experience geographically. The final section addresses some of the difficulties that small businesses will encounter in the near future. Each section ends with recommendations for overcoming the challenges in the apprenticeship system and improving it for smaller firms.

Edited excerpts from publication.