At the beginning of April I posted a blog about the early indications that the Governments new apprenticeship scheme was not ready for delivery as promised back in 2015. As of the 6th April the Government began collecting a new form of taxation from medium to large employers called the Apprenticeship Levy. The plan was that from the 1st May all employers would be eligible to recruit apprentices to help them expand their workforce. Far too often MPs like Henry Smith of Crawley post tweets to suggest that the Government has created new jobs. The fact is that Governments are not capable of creating jobs apart from through the civil service. However what competent Governments can do is create frameworks through which employers can find it easier and more economically viable to recruit new workers. This is particularly important for small businesses and micro enterprises. For large businesses to recruit a handful of staff, whilst each individual employed has the potential to change their future, in terms of society as a whole this makes little difference. However if small businesses were to take on an apprentice this could have an enormous impact on our society due to the number of such businesses. However small businesses are far less well prepared for taking on new employees and need a great deal of assistance if such changes are going to work well for the business and also the apprentice. This is where the new apprenticeship levy is intended to be of assistance. Although the levy is only collected from large employers, all employers are supposed to be able to benefit from its impact of offering financial assistance to take on a new apprentice and the support being offered as part of the package. However the latest news is that this is now to be delayed for small businesses.
As this news article explains, the Education and Skills Funding Agency (ESFA) has just revealed that they have been overwhelmed with applications from suitable training providers and so they are pausing the process of introducing new providers into the apprenticeship market to “review our approach to ensure that we achieve the right balance between stability of supply and promoting competition and choice for employers”. It is clearly very discouraging for the new training providers that had hoped to participate in this scheme from the beginning of next month, particularly as this was something that had been some time in the planning as far as the ESFA is concerned. These organisation will have employed new trainers who they will now need to lay off. Arguably it is even more of a frustration to the small businesses who had been planning to take on new workers, but the people who will really lose out are the young people who had been preparing to take advantage of these new arrangements promised by George Osborne in his budget speech in 2015 when he said “By 2020, we want to see 3 million apprentices… Today I am setting the rate at 0.5% of an employer’s paybill. Every employer will receive a £15,000 allowance to offset against the levy – which means over 98% of all employers – and all businesses with paybills of less than £3 million – will pay no levy at all… Britain’s apprenticeship levy will raise £3bn a year. It will fund 3 million apprenticeships. With those paying it able to get out more than they put in.”
The start of this programme has now been delayed from the beginning of May 2017 until the beginning of January 2018 at the earliest. This means not only that small businesses will be denied access to this scheme for at least 8 months, but that many school leavers this Summer will be denied a chance to leave school and find an apprenticeship. They will be forced to wait at least 6 months by which time their optimism and enthusiasm may well have drained away. It will be fascinating to see if the Chancellor will take the trouble to explain about this with quite the flourish that George Osborne applied or if MPs like Henry Smith will take to twitter to berate their own Government for its failure or simply keep quiet in the face of this embarrassing failure?