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Apprenticeships: The hidden facts small businesses need to know

National Apprenticeship Week is a celebration of the positive impact that apprenticeships can make to individuals, businesses, and the wider economy. But, do small businesses know how to access apprenticeship opportunities and how they can cover the costs? This blog will focus on three hot topics affecting apprenticeships and SMEs – the levy transfer, flexi apprenticeships and promoting apprenticeships to existing staff. A better understanding of each of these areas will support a small business when thinking about apprenticeship options.

Can an SME cover the cost of an apprenticeship with the levy?

The levy can be extremely beneficial to small businesses, if used in the right way. Large employers who pay the apprenticeship levy, can choose to transfer up to 25% of their own levy funds each year to other businesses to pay for their apprenticeship training and assessment. A transfer covers 100% of the training costs of the apprenticeship standard and avoids smaller businesses paying the 5% contribution towards the training. 

Why do large businesses do this? Transferring levy funds is a great way to support small businesses and close the skills gaps in different sectors and locations. Larger employers can also benefit from improved relationships within their supply chain - and by supporting business growth they adhere to their social and economic responsibility, which is vital.

How does an SME find a business to fund apprenticeship costs?

In order to be considered for funding,  a small business will need to create an apprenticeship service account. This online government service allows a business to set up and manage their apprenticeships and funding, as well as, set up and approve apprentices, training costs – and more.

Large businesses must create a pledge that is advertised on a funding opportunities page. The pledge shows how much funding is available for that financial year and the type of businesses they would like to support by selecting optional sector, skill or location criteria. Small businesses can then search and apply for a transfer of funds on the funding page.

What are the funding opportunities for SMEs available right now?

There are currently 163 funding opportunities available to businesses in sectors such as education, transport, construction, health and science and finance. Durham University, for example, is currently offering funding for apprenticeship training in any sector, job role and level opportunity based in Durham. They currently have up to £117,072 of available funding for 2022/23. 

If you are an SME and thinking about apprenticeships, it is definitely worth looking at the levy transfer and the potential opportunities available to your business.

Did you know an apprenticeship can be tailored to your business? 

Another route to consider is flexi-job apprenticeships, which offer businesses the opportunity to flex their training and apprenticeship needs by employing different people with varied skills and experience. This could really benefit some SMEs, where flexible or project-based working is the norm.

How can SMEs flex an apprenticeship?

Flexi-job apprenticeships are available to both employers and apprentices. There is a Register of flexi-job apprenticeship agencies that recruits and employs apprentices, placing them with employers. The purpose of the agencies is to bridge the gap to support employers realise the benefits of apprenticeships for their businesses.

There are currently 30 organisations on the Register and 11 of them have been awarded a total of £5m in grant funding. 

The Register, which is due to be updated again this year, contains many government-approved agencies covering a wealth of sectors including, hospitality, warehousing, logistics, engineering, retail, digital. Many of the agencies listed are solely looking for SMEs to support.

Thinking about upskilling existing staff with an apprenticeship?

SMEs can use apprenticeships to upskill and reskill existing staff. Apprenticeships can help fill key skill gaps in the business, boost employee motivation - by investing in their development - and improve retention. There is now an apprenticeship standard to cover almost any job role. The opportunity for employers is huge to access excellent industry endorsed training at a fraction of the cost of paying for it commercially, and in some cases for free via levy transfer.

The government’s apprenticeship website, provides the example of an experienced member of staff undertaking a formal qualification in their specialist area. Equally, another employee might be keen to learn something entirely new.

Remember, it is possible for the apprenticeship levy transfer to be used for existing staff too.

How can an apprenticeship can work for your business?

Our North East Ambition Skills Facilitator, Julia Bell, an experienced business professional, recently decided to start a Level 6 Digital Marketing apprenticeship – with a plan to progress to Level 7. She said: “I decided to do an apprenticeship because I wanted to back my practical skills up with a high-level qualification, plus, learn some new skills and apply them directly within my current role to make a positive impact with the project I am working on.”

With over 600 different apprenticeships and four educational levels, there really is something for everyone!

Does your business need support with apprenticeships?

Our North East Ambition team can help guide you through the levy transfer, flexi-job apprenticeships, and are on hand to provide general advice if you are considering apprenticeships for your business – all free of charge. Contact us for an initial discussion.

About the North East Ambition programme

The North East Ambition programme was launched to provide small business owners with information, resources, and specialists to help bridge their skills gaps. Delivered in partnership with the North East Local Enterprise Partnership, we help employers in all sectors across the North East train and upskill their teams.