SME employers will no longer have to contribute to the cost of new starter apprenticeships for 16–21-year-olds following a commitment by UK Government to fully fund the training costs for young people starting apprenticeships from 1 April.

The announcement follows calls by the Council to introduce greater incentives for small business owners who take on apprentices and retain and nurture staff.

The Value of Beauty Report 2023 identified the industry as having a higher proportion of micro (78%) and small businesses (95%) compared to most other industries. They are also most likely to have less than five employees, with each individual vital in the operation and income of the business.

Investment in an apprentice is a significant business decision and one that government data suggests fewer salons are choosing to take. Employers are fundamental to vocational education as a key facilitator in this process and without them, the current apprenticeship and training model cannot survive.

The Council has therefore welcomed the Government’s £60 million investment for next year, together with a commitment that where there is demand for apprenticeships from businesses, the government will ensure there is enough funding to deliver them.

Victoria Brownlie, British Beauty Council Chief Policy Officer attended the launch of the new measures at SME Business Connect conference in Coventry and commented:

“The announcement today is a positive for our industry as a significant employer of young apprentices and addresses some of the concerns we had been continuing to raise with Government in terms of where support was still lacking when it comes to encouraging small salons and beauty businesses to invest in our future skilled workforce.”

“What’s missing, however, and again something we continue to raise, is support for employers of existing apprentices and the need to not lose sight of the need to invest in older learners – who actually carry a larger cash burden for businesses. This is vital for reskilling, maintaining a diverse workforce and ensuring we are providing opportunities for all.”

The Government also announced the establishment of an ‘Invest in Women Taskforce’ to boost private investment in women-led businesses. This follows a successful cross-industry campaign to overturn recent rule changes around investor eligibility, which looked set to further disadvantage for women and other underrepresented groups in accessing finance. As an industry heavily populated by female entrepreneurs and start-ups, but that often struggles to scale-up, the Council has requested representation and input into the workplan of the taskforce.

Other measures announced today include:

• An increase to the amount of funding employers who pay the apprenticeship levy can pass onto other businesses from 1 April. Under the new measures, large employers who pay the levy can transfer up to 50% of their funds to support SMEs to take on apprentices.
• Deregulatory measures to simplify both non-financial and financial reporting for SMEs, including increasing the number of companies that qualify as an SME through a 50% uplift to the thresholds that determine a company’s size.
• Removing and modernising a number of previous EU reporting requirements, including for what companies must set out in their annual reports.

Full details of the new apprenticeship funding can be found here.

Employers with existing apprentices will continue to follow the apprenticeship funding rules relevant to the year the apprenticeship began. For those with apprentices that started before 1 April 2019, employers pay 10% towards the cost of training and assessing an apprentice and the government pays the rest. Between 1 April 2019 to 31 March 2024, employers pay 5% towards these costs. Ensure you have an apprenticeship service account to receive these payments. A handy ‘how to’ article on this can be found here.

The other Government measures outlined by the Prime Minister can be found here.