Balancing the budget

There was much for the plumbing and heating industry to welcome in Chancellor Rishi Sunak’s spring budget. With measures in place to reduce unemployment and encourage apprenticeships and traineeships, it seems that the Government has eyes firmly set on the key Covid-hit areas of education and employment. In regard to Further Education (FE) and training, the budget unsurprisingly focused on English affairs, as the devolved nations of Scotland, Wales and Northern Ireland, govern their own education systems accordingly. However, the Treasury has offered a training boost nationwide to SMEs. In this article, we explore the main initiatives announced, many of which build on those introduced at the beginning of the pandemic.

Apprenticeship incentives rise

The Chancellor announced a rise in incentives paid to employers hiring an apprentice. Those taking on an apprentice from 1 April - 30 September 2021, will receive £3,000 per new hire, regardless of age. Under the old scheme it was a £2,000 payment for those aged under 24, and £1,500 for those aged 25 and over. This marks a step change to a more equal system, and could hint that the Government is expecting many experienced workers to re-train in new areas.

This payment is in addition to the existing £1,000 the Treasury provides for all new apprentices aged 16-18, and on top of the £1,000 received when employers take on an apprentice aged under 25 with an Education and Health Care Plan (EHCP).

Portable apprenticeships

The Chancellor announced that from July 2021, a £7 million fund would be available to help employers in England set up and expand “portable” or “flexi-job” apprenticeships. It’s a concept designed to increase apprenticeships in industries where flexible working is the norm. The apprentice would be employed by an agency and complete their apprenticeship training by working on multiple projects with different employers.

While this scheme is being introduced with the creative industries in mind, the CIPHE is already working in partnership with Ideal Standard and FIESTA on a similar model (see p12) and the Construction Industry Training Board (CITB) has shown a keen interest too. There are many parallels between the creative and construction industries, where the majority of employers are SMEs and sole traders and may not be able to commit to taking on an apprentice for a full four years but may benefit from tapping into an apprentice talent pool for a smaller set amount of time.

The budget for this potentially revolutionary initiative seems low but it is at least a start, and shows some recognition of the circumstances under which businesses are operating. Time will tell whether this system is workable, but it does offer a glimpse into addressing the biggest problem with apprenticeships in the plumbing and heating industry – a lack of employers.

Traineeships

The Treasury pledged an additional £126 million for traineeships. This should provide around 40,000 workplace and training placements for those aged 16-24, in the 2021-22 academic year.

In the plumbing and heating sector, traineeships can offer an introduction to the industry, allowing students to put their toe in the water before deciding on undertaking an apprenticeship, or embarking on a course. While this can be highly beneficial to the learner, many may question the benefit to the industry. Unlike apprenticeships, traineeships are unpaid and normally last around six months, though they can last anything from six weeks to a full year. Employers will continue to receive £1,000 per trainee, when providing a work placement.

Apprenticeship Levy

Talking of good news, there was some waiting in the wings for the beleaguered Apprenticeship Levy, with the government expecting money raised to increase from £2.8 billion in 2019-20 to £3.4 billion in 2025-26 – a rise of 20%.

Help to grow scheme for SMEs

The government is aiming to help 100,000 small to medium businesses (of 5-249 employees) to aid the recovery from Covid-19. The plan is to develop digital skills to create a UK-wide management programme designed to up-skill 30,000 SMEs over three years.

Help to Grow: Management

It is said that this will enable SMEs to access a 12-week programme delivered by leading business schools across the UK, combining a practical curriculum, with 1:1 support from a business mentor, peer-learning sessions and an alumni network. Participants will develop a tailored business growth plan to lead their business to its full potential.

30,000 places will be available over three years. The programme is 90% subsidised by government, with participants paying the remaining £750.

Help to Grow: Digital

From autumn, small businesses will be able to get free impartial advice on how technology can boost their performance, via a new online platform.

Eligible businesses will also be able to get a discount of up to 50% on the costs of approved software, worth up to £5,000. Vouchers are initially expected to be available for software that helps businesses:

  • Build customer relationships and increase sales
  • Make the most of selling online
  • Manage their accounts and finances digitally

Full details on the businesses and software eligible for the voucher will be published this summer.

Chartered Institute of Personnel and Development (CIPD)

  • Total apprenticeship starts have fallen by over a third, from 494,900 in 2016/17 to just 322,500 in 2019/20
  • The number of apprenticeships going to under 19s has fallen from 122,800 in 2016/17 year to just 76,300 in 2019/20
  • The number of apprenticeships going to 19-24 year-olds has declined from 142,200 per year to 95,300 per annum over the same period
  • Overall employer investment in training which the levy was supposed to boost, has also declined, with employer funded off-the-job training in England falling by £2.3bn between 2017 and 2019
  • The current funding arrangements are also failing smaller organisations. In 2016 11% of small businesses (less than 50 employees) had apprentices in their organisations, but by 2019 this had fallen to just 9%

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