New apprenticeship funding ‘fair settlement’, says FMB

Published:  15 August, 2016

New apprenticeship funding proposals announced today by the government look like a ‘fair settlement for small employers’, according to the Federation of Master Builders (FMB).

Brian Berry, FMB chief executive, said: “Getting skills and apprenticeships policy right is essential to the UK, and particularly so to the construction industry right now. We face serious skills shortages in our industry at the moment. The only long-term cure for this is to recruit and train more people; in particular to attract a new generation of talent to take on the skilled jobs the industry creates.

“Small and medium-sized firms do the majority of training in our industry - micro businesses (those employing fewer than ten people) alone train around half of all construction apprentices. It is therefore crucial that new apprenticeship funding arrangements work for these firms and do not impose higher costs on them.”

According to the new arrangements, employers with wage bills of less than £3m, who will fall beneath the threshold for paying the new Apprenticeship Levy, will be required to pay 10% contributions towards the cost of training and assessment. This means most small employers should not end up paying more towards training costs than they currently do. Furthermore, FMB members report significantly higher costs and difficulties associated with training apprentices straight out of school. Mr Berry believes that it is right that for small employers training 16-18 year olds this co-investment requirement will be waived and a further £1,000 payment will be paid to employers to help with these costs.

Mr Berry continued: “One issue on which we have ongoing concerns is the difficulties and complexities which might come with the new digital apprenticeship service. Small firms express nervousness at the more hands-on role they are being asked to play in negotiating with and paying training providers, and there is real danger in the new system being time-consuming and complicated to a degree, which puts off small firms from training.

“As such, we strongly welcome the decision not to require small employers to start using the new system until at least 2018. Government and representatives of small employers need to use this time to thoroughly road test the new system and make sure that it fits the needs of the very smallest firms, those we continue to rely on to train the majority of our industry’s workforce.”

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