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Posted: Mon 18th Mar 2024
Fully funding the cost of apprenticeship training at small companies was among the business support announcements made by prime minister Rishi Sunak today.
At the ‘Business Connect’ event in Warwickshire, attended by Enterprise Nation, Sunak said that from 1 April £60m in funding will mean small businesses no longer have to contribute to the cost of training apprentices aged 16-21.
He also announced that from 6 April big businesses will be able to transfer more of the amount they pay for the apprenticeship levy to small firms. The proportion will increase from 25% to 50%.
Enterprise Nation was among the business groups that requested this change from the government because millions of pounds of the levy, which was introduced in 2017 to increase the number of apprenticeships, remains unspent each year.
The government says these two policies will create 20,000 new apprenticeships.
Another announcement at the event was the creation of an Invest in Women taskforce to tackle the funding gap faced by female entrepreneurs. The proportion of equity capital investment going to all-female founder teams has been .
The taskforce will be led by entrepreneur Debbie Wosskow and Barclay's Hannah Bernard, with small business minister Kevin Hollinrake representing the government. Core aims of the group are raising a £250m bespoke fund for female-founded businesses through private capital and addressing the wider challenges female entrepreneurs face when setting up and growing their business.
In a move which the government also said will simplify non-financial and financial reporting for businesses, the prime minister said that the government will raise by 50% the threshold that defines micro firms as well as small and medium sized enterprises (SMEs). The government says as a result of these changes, 113,000 small businesses could be classed as micro businesses, and 13,000 medium businesses could become small businesses.
In addition, the government said it will consult on exempting medium sized businesses from producing a strategic report which it claimed could save those firms £148m a year.
Prime minister Rishi Sunak said:
"Growing up in my mum's pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
"Whether it's breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses -- this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.
"Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country."
Debbie Wosskow OBE, co-chair of the Invest in Women taskforce and multi exit entrepreneur, said:
"Women leading businesses shouldn't have to face funding challenges to build and grow their business, because of their gender.
"As an experienced entrepreneur, who founded her first business 25 years ago, I know first-hand the importance of breaking down barriers and making meaningful change for female led businesses.
"By putting funding front and centre of this taskforce, we aim to make the UK the best place in the world to be a female founder."
In an announcement made ahead of the event, the government said import tariffs on 120 goods coming into the UK will be paused from 11 April until June 2026. Affected products include agricultural goods like juices, preparations and starches, and non-agricultural products such as leathers, ceramics, and car parts.
Following Brexit, the government launched a new UK tariff suspension scheme to allow companies that use imports to ask for duties on them to be partially or wholly withdrawn for a set period.
In her speech at the conference, business secretary Kemi Badenoch confirmed the launch later this month of the British Business Bank's £660m Northern Powerhouse Investment Fund II to provide loans and equity investment to firms in the North of England.
Badenoch also announced that Phil Smith CBE is the chair of the new SME Digital Adoption Taskforce, which was originally announced in the 2023 Autumn Statement. The taskforce will help small businesses adopt digital technology such as AI.
On the creation of the Invest in Women taskforce, Daniel Woolf, Enterprise Nation head of policy and government relations, said:
"The creation of the Invest in Women taskforce is a positive step to help impact the stark funding gap facing female entrepreneurs. But one of the key issues that our own research has found is that women are more risk averse than men with the finances in the early stages of building a business.
"We need to do more to help women raise the funding bar and understand the benefits of taking on finance at an earlier stage and much of this can come down to working on financial forecasts to see the positive impact of taking on investment. We also need to work harder to connect women to networks that can support them in doing so.
"While this announcement rightly raises hopes, the proof will be in the delivery and impact and if it tackles these grass roots issues which prevent women from going to investment in the first place."
On the apprenticeship levy change, Daniel Woolf said:
"Small businesses have been crying out for affordable access to support that will help close the skills gap for many years, so Enterprise Nation welcomes the Prime Minister's plans to reform the apprenticeship levy. Allowing larger businesses to share a greater proportion of their unspent levy with their supply chain will be key to help build stronger capabilities and create a more resilient business ecosystem, benefiting all.
"For small businesses receiving a higher Levy transfer, the advantages are substantial. It increases access to talent by enabling competitive salaries, for example and cutting the red tape is an enormous step forward as many of our businesses have told us this is one of the major barriers to taking on an apprentice.
"In our Spring Budget submission, we called for enabling higher Levy transfers to supplier firms. This announcement delivers on that request from Enterprise Nation's members with smaller suppliers in their supply chain, targeting key skills gaps or driving innovation through collaboration."
