In a significant economic address at the Business Connect conference in Warwickshire, the Prime Minister unveiled a comprehensive reform package for SMEs.
The package, unveiled on Monday 18 March, aims to bolster apprenticeships, reduce red tape for small and medium-sized enterprises (SMEs), and foster investment in female-led businesses.
Boosting Apprenticeships and SME Support
Effective from April 1st, the government will fully fund apprenticeships in small businesses, covering the entire cost of training for individuals up to the age of 21. This initiative aims to alleviate financial burdens on businesses while expanding opportunities for young people to embark on their career journeys.
Additionally, the government has earmarked an extra £60 million in funding for the next fiscal year to ensure that there’s sufficient financial support to meet the demand for apprenticeships from businesses across various sectors.
Enhanced Levy Transfer Scheme
Large employers subject to the apprenticeship levy will now be able to transfer up to 50% of their unused funds to support other businesses, including SMEs, in hiring apprentices. This measure seeks to reduce costs for SMEs and facilitate access to skilled workers while broadening apprenticeship opportunities.
To date, over 530 levy-paying employers, including ASDA, HomeServe, and BT Group, have pledged to transfer more than £35.39 million to support apprenticeships in businesses of all sizes since September 2021.
Driving Economic Growth and Skills Development
The reforms are anticipated to create up to 20,000 additional apprenticeships, primarily targeting young people, contributing to the government’s broader strategy of fostering a resilient economy and equipping young individuals with the skills needed for success in the workforce.
Prime Minister Rishi Sunak underscored the importance of small businesses as engines of innovation and drivers of economic growth. He reaffirmed the government’s commitment to supporting SMEs, fostering youth employment, and empowering women entrepreneurs.
Streamlining Regulatory Processes for SMEs
In addition to apprenticeship reforms, the Prime Minister announced further deregulatory measures aimed at simplifying non-financial and financial reporting for SMEs. These measures are expected to save businesses around £150 million annually. Among the proposed changes is a 50% uplift to the thresholds determining a company’s size, benefiting approximately 132,000 businesses by exempting them from extensive form-filling and reporting requirements.
Furthermore, consultations will be initiated later this year on additional measures, such as exempting medium-sized companies from producing strategic reports, potentially saving them an additional £148 million annually, and raising the employee size threshold to redefine SMEs.
