MPs have urged the government to make ‘radical improvements’ to its apprenticeship programme, after finding that small employers are ‘missing out’ on the benefits associated with apprenticeships.
In a new report, the Public Accounts Committee (PAC) revealed that the number of apprenticeship starts fell by 26% following the introduction of the Apprenticeship Levy. The Committee predicts that the government won’t meet its target of three million starts by 2020.
The PAC also stated that the government’s focus on higher-level apprenticeships and levy-paying employers ‘increases the risk that small employers may miss out’ on the benefits associated with apprenticeships.
‘The number of people starting apprenticeships is falling significantly short of government targets,’ said Meg Hillier, Chair of the PAC.
‘The government will not meet its goal of three million starts by March 2020 and the Department has underspent on the programme’s budget by 20%.
‘The Department for Education must get its reform of apprenticeships back on track, realigning the programme with its initial objectives so that as much of the population as possible can benefit from it.’
The Committee has urged the government to outline how it will ensure that smaller employers can ‘benefit fully’ from the apprenticeship programme.
A report published by the British Business Bank has revealed that a third of small businesses believe it will become ‘more difficult’ to access finance once the UK leaves the EU.
The Bank’s 2019 Small Business Finance Markets report also revealed that, although 29% of small firms expect Brexit to have a ‘negative impact’ on their business, many remain optimistic about growth, with half of small businesses still aspiring to expand over the next 12 months.
However, the overall demand for external finance has declined, according to the report: just 36% of small businesses used external finance in 2018. Evidence also suggests that some firms are delaying longer-term investment decisions until after Brexit.
Commenting on the report, Keith Morgan, CEO of the British Business Bank, said: ‘It is clear that a lack of confidence is affecting many smaller businesses, as evidenced by a continuing drop in demand for external finance. It is, however, encouraging to see that half still aspire to grow, and that there’s increased awareness of a broader range of finance options.
‘This will be an important factor in ensuring that smaller businesses are better placed to make the right finance choices as uncertainty diminishes and confidence returns.’
A survey carried out by the Federation of Small Businesses (FSB) has revealed that confidence amongst small firms has ‘fallen to its lowest level since 2011’.
The FSB’s Small Business Index (SBI) revealed that confidence has fallen to -9.9 – its lowest level since the wake of the financial crash in 2011.
According to the SBI, 58% of small firms believe that the domestic economy is ‘restricting their ability to grow’. Lack of consumer demand, limited access to skilled staff and rising labour costs were also cited as being barriers to growth.
Commenting on the findings, Mike Cherry, National Chairman of the FSB, said: ‘Two and a half years on from the Brexit vote and small businesses are looking ahead to Brexit day with no idea of what environment they’ll be faced with in less than ten weeks’ time.
‘Come the beginning of April, small firms will not only have Brexit day to worry about but also Making Tax Digital (MTD), a higher living wage, rising auto-enrolment contributions and further business rate hikes.’
The Federation of Small Businesses (FSB) has warned that productivity amongst UK small firms is ‘still being held back’ by poor broadband and mobile coverage.
The FSB’s warning comes in response to Ofcom’s annual Connected Nations report, which revealed that, while the availability of superfast broadband has increased, only 90% of small businesses are able to access superfast speeds.
Meanwhile, 18% of rural firms ‘still lack a decent broadband connection’, according to the report. It also revealed that rural businesses receive just 41% of 4G coverage.
It is ‘imperative’ that small firms are connected to a basic level of broadband ‘without delay’, the FSB stated.
‘Access to fast and reliable broadband and good mobile signal is vital for small businesses,’ said Mike Cherry, National Chairman of the FSB.
‘There are still so many firms coming up against agonisingly slow speeds – and when your business relies on this connection, it’s not only frustrating, but impacts on your ability to do business.
‘Most businesses want to embrace digital technology to compete and enhance their productivity, but to do this they need a decent connection and good quality service.’
Confidence amongst UK small businesses has ‘fallen to its lowest point since 2011’, the quarterly Small Business Index (SBI) published by the Federation of Small Businesses (FSB) has revealed.
The SBI currently stands at -9.9 – which, according to the FSB, reflects a ‘level of pessimism not seen since the aftermath of the financial crash’.
The FSB also found that 43% of firms expect their performance to worsen over the coming months. A further 67% of businesses do not expect to increase capital investment in the next three months, according to the SBI.
‘We’ve not seen political uncertainty weighing on small business confidence like this for many years. Planning ahead has now become impossible for a lot of firms as we simply don’t know what environment we’ll be faced with in little more than 100 days’ time,’ said Mike Cherry, National Chairman of the FSB.
‘A pro-business Brexit is one that ensures we can trade easily with the EU and have access to the skills we need. The latter is already proving a challenge, and – if we crash out of the EU on 29 March without a deal – the former will go out the window.’
However, the SBI also revealed that some small firms are continuing to recruit, with 16% having taken on a new member of staff in the past three months. An additional 68% have increased pay, and 50% of firms plan to grow their business over the next 12 months.
A new report published by the Business, Energy and Industrial Strategy (BEIS) Committee has highlighted how ‘bad payment practices’ have led to the ‘failure’ of many small and medium-sized enterprises (SMEs).
The government’s Prompt Payment Code, which was created to address poor payment practices, has ‘too often’ been ‘ineffective’, according to the Committee.
A ‘statutory requirement’ for companies to pay within 30 days should be introduced, the Committee stated. It also recommends giving the Small Business Commissioner the power to fine large businesses who pay their suppliers late.
Commenting on the report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Eliminating the scourge of late payments would see 50,000 businesses saved each year, [and] add £2.5 billion to GDP, which would be a real boost to UK productivity.
‘The government must respond to this report with tough action on late payments, supporting smaller businesses to further develop their leadership and management capability, and to improve the adoption of basic digital technologies that small businesses need to grow and become more productive.’
The government is urging small businesses to make use of so-called ‘broadband vouchers’, which are worth £2,500.
The Gigabit Broadband Voucher Scheme helps small firms in covering the cost of installing a full fibre, gigabit-capable connection. The government intended for the scheme to run until March 2021, but ‘high demand’ for the vouchers means that the funds are now expected to be committed a year earlier.
In order to encourage neighbouring businesses to ‘pool’ their vouchers, the government has reduced the maximum value of the voucher from £3,000 to £2,500. The Department for Digital, Culture, Media and Sport stated that the move will enable the scheme to ‘reach more properties, without the need for any additional funding’.
The Federation of Small Businesses (FSB) is supportive of the scheme. Mike Cherry, its National Chairman, said: ‘Access to good broadband is vital for small businesses across the UK, and with the clock ticking on this scheme, it’s important small businesses don’t delay if they want to apply for funding.’
Details on how to apply for the voucher scheme can be found here.