Business group calls for AI training for new skills to be made tax deductible

The Federation of Small Businesses (FSB) has called for artificial intelligence (AI) training for new skills to be made tax deductible for small firms.

Research carried out by the FSB found that whilst 20% of firms currently use AI, an additional 29% are reluctant to utilise the technology because they feel ill-equipped to do so.

It also revealed that 27% of firms who currently use AI plan to invest in additional training for employees. An additional 43% stated they plan to take a course to improve their AI knowledge over the next two years.

The FSB is calling on the government to make training for new skills tax deductible for small firms and the self-employed in order to help ‘kickstart a new era of skills development in AI’.

Commenting on the issue, Martin McTague, National Chair of the FSB, said: ‘AI has the ability to streamline administrative processes and bring a host of business benefits. Indeed, our research shows small firms are excited about its potential.

‘However, as AI technologies advance at a rapid clip, some remain hesitant to join the digital wave because they are limited by a lack of relevant skills.

‘The tax framework in place does little to spur the reskilling and upskilling essential for technological adoption. Allowing tax deductions for the self-employed in a wider array of training – such in AI – can help people adapt.’

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BCC calls for government to ‘unlock power of British business’

The British Chambers of Commerce (BCC) is urging politicians to help stimulate economic growth across the UK and ‘unlock the power of British business’.

In a recently published action plan, the BCC has called for flexibility in the Apprenticeship Levy to support everyone in the workplace; strengthened UK-EU co-operation to increase investment; and ‘dramatic’ energy grid upgrades.

According to the business group, the plan ‘outlines a framework for collaborative working between business and politicians’.

‘The economy thrives when business and politicians work in partnership,’ said Shevaun Haviland, Director General of the BCC.

‘A better planning system, a flexible Apprenticeship Levy, strengthened UK-EU co-operation and a dramatic grid upgrade are all needed urgently.

‘All too often businesses are squeezed out of towns and cities, as good land is given over to housing. Local communities thrive when businesses are at their heart. Those businesses need skilled workers, and a flexible Apprenticeship Levy will make sure employers can give staff the training they need.’

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Recruitment key to fixing inflation, says BCC

The British Chambers of Commerce (BCC) has stated that the government must ‘fix the recruitment problem’ in order to help ease inflation and minimise the pressure generated by interest rate rises.

According to a survey carried out by the business group, 79% of firms attempting to recruit have faced significant challenges. 60% of businesses polled attempted to recruit in the second quarter of 2023.

The survey also shows that the percentage of firms experiencing recruitment issues has fallen by just three points from a high of 82% recorded in the fourth quarter of 2022. This percentage has stayed above 75% for the last two years, the BCC stated.

It said the lack of people in jobs ‘holds back growth and reduces opportunities for investment, including in training’.

Jane Gratton, Head of People Policy at the BCC, said: ‘The tight labour market continues to ramp up wage costs, fueling inflation and creating huge difficulties for businesses. With the Bank of England expected to increase interest rates again, it is vital that government boosts efforts to increase the supply of labour to help break the cycle.

‘Firms are being squeezed on all sides. With 36.8 million jobs in the economy, there are more employment opportunities than ever before. But we also have low unemployment, and over a million jobs are currently left unfilled. Firms cannot fulfil order books and are turning down new work.’??

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Tax and training reforms vital to safeguard retail sector

Urgent reforms to the UK’s business rates system and Apprenticeship Levy are essential to support the UK’s retail industry, according to new research from the Confederation of British Industry (CBI).

The research shows that the retail sector is worth over £350 billion a year to the UK economy and supports 5.7 million jobs.

However, the fallout from Covid and the war in Ukraine continues to weigh heavily on the sector. An inflation-linked 10% business rates hike due in the spring risks plunging many firms into a fight for survival.

The CBI and the British Retail Consortium (BRC) are urging the government rethink the planned rise.

The CBI is also keen to see greater flexibility in the Apprenticeship Levy.

Matthew Fell, CBI Chief Policy Director, said: ‘We are asking government to smooth the looming business rates cliff edge; without intervention, the eye-watering rises scheduled for April will present an existential threat for many businesses which communities depend on.

‘Longer-term reforms which encourage investment and fresh thinking on the Apprenticeship Levy can help futureproof the sector and spur further growth.

‘While this is a fragile moment for the economy, and the immediate focus is rightly on restoring macroeconomic stability, there is real ambition within retail and wholesale to help unlock the huge growth opportunities for UK businesses. They know the right actions now mean we can look forward to a 2023 of promise, potential and prosperity.’

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Report finds SMEs facing recruitment struggles

Eight in ten small businesses are finding it difficult to recruit staff, according to a report published by the Federation of Small Businesses (FSB).

The FSB’s ‘Scaling up Skills’ report found that over 80% of small firms are flagging a lack of relevant qualifications, skills and experience among candidates as a problem, while 60% say a lack of applicants is an issue. 

More positively, five in six small employers provided training for themselves and their staff in the previous 12 months, with seven days of training and development per staff member on average.

Though critical to future sustainable growth, only a quarter of small employers say they have undertaken leadership and management training over the same period.

FSB Policy Chair, Tina McKenzie, said: ‘Our members tell us their growth potential is being held back by a lack of appropriately skilled staff, with vital roles going unfilled, ultimately harming the economy.

‘This skills and training deficit is a perennial issue, but far from an insoluble one. Our report sets out a roadmap for change on every level, from schools to apprenticeships to workplaces.’

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BCC calls for government to extend skills training

The British Chambers of Commerce (BCC) has urged the government to extend skills training in light of the publication of research which showed that one in five companies are considering making redundancies as a result of the coronavirus (COVID-19) pandemic.

The BCC has stressed concerns that older workers could go unutilised unless support for retraining is put into place immediately.

The BCC survey, which polled over 250 businesses with employees still on furlough, revealed that one in five are planning to make staff redundant following the rise in employer contributions to the Coronavirus Job Retention Scheme (CJRS).

Jane Gratton, Head of People Policy at the BCC, said: ‘The changes to the furlough scheme will likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours.

‘With widespread skills shortages across the economy, some will find new jobs where their skills are in demand, while others will need to retrain for opportunities in a different sector.’

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Experts urge government to simplify Apprenticeship Levy

Experts have called for the government to ‘simplify’ the Apprenticeship Levy amidst claims that it has ‘complicated learning and development’.

A survey of UK firms conducted by the Managing Partners’ Forum suggested that the number of apprentices ‘would be boosted’ if the Apprenticeship Levy rules were simplified.

32% of businesses polled stated that the Apprenticeship Levy has ‘displaced budget away from the most needed learning and development’, whilst an additional 24% said that the Levy has ‘increased the cost of training’.

‘It is perhaps unsurprising that the Levy is viewed by many as an extra tax that complicates learning and development,’ said Richard Chaplin, Chief Executive of the Managing Partners’ Forum.

‘There is clearly support for the concept of apprenticeships, not least because of their important potential role in helping to address persistent issues around diversity and social mobility within the professions. However, simplification of the rules around apprenticeships – and particularly the Levy – must be considered for the real potential impact to be realised.’

CBI sets out four-point plan for new apprenticeship levy

The Confederation of British Industry (CBI) has set out its proposals for an ‘effective’ apprenticeship levy, despite initially being opposed to the new measure.

CBI Director-General Carolyn Fairbairn has written to Business Secretary Sajid Javid with a four-point plan for the levy, which was first announced in November’s Autumn Statement.

The new apprenticeship levy will come into effect from April 2017 and will be set at 0.5% of an employer’s paybill. It is a key measure intended to help meet Chancellor George Osborne’s target of creating three million apprentice starts by 2020.

In her letter to the Business Secretary, Ms Fairbairn called for a particular focus on SMEs and smaller levy payers, asking for a reduction in the system’s administrative burden.

She wrote: ‘The apprenticeship levy is a significant step. Its introduction is not an approach the CBI supported.

‘However if it is to be successful in providing the higher rates of training we all want to see, the levy system must ensure training is relevant and valuable for businesses and that it helps individuals build their careers.’

The four points set out by the CBI were:

• That the system must be ‘driven by economic and business need’
• That there should be flexibility in the system for different sectors and sizes of firm
• That the system should ‘fund quality and reward commitment’
• That there should be ‘relevant and simple apprenticeship standards across all parts of the UK’.

Every employer will receive a £15,000 allowance to offset against the apprenticeship levy, and the Government claims that 98% of all employers – and all businesses with salary costs of less than £3 million – will pay no levy at all.