Apprenticeship funding reforms: longevity and stability needed to help employers

As the Government’s Apprenticeship funding reform in England: payment mechanisms and funding principles consultation closes, the Institution of Engineering and Technology (IET) is stressing the need for longevity and stability with the new arrangements, enabling businesses to plan effectively.

Commenting, Paul Davies, IET Head of Policy said: “In reforming the funding arrangements for apprenticeships, the Government must take into account two issues; complexity and cash-flow.

“The new funding arrangements must work for all businesses both big and small. It is imperative that the reforms do not disproportionately impact the cash flow of small businesses who will have to pay up-front for training and then claim it back. We do not want this to act as a disincentive for SMEs to engage with apprenticeships.

“Small businesses, in particular, will weigh the benefits of a new scheme against the costs and administrative burden that it would impose. They may conclude that the burden outweighs the benefit and decide not to take on new apprentices.”

The IET has welcomed this week’s report from the EEF Improving the quality and quantity of graduate-level skills, which recommends a transition period for small businesses which would enable them to adapt to the new funding mechanisms.

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