ECA issues warning on funding for SME apprenticeships

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ECA has warned that proposed increases in funding for non-levy paying employers to invest in apprenticeships may not be enough to address the sector’s current and future needs.

The comments follow a call from Jennifer Coupland, the new chief executive of the Institute for Apprenticeships and Technical Education, for an additional £750 million for SME apprentices. Coupland made the remarks during an interview with the Financial Times shortly after her appointment.

Meanwhile, the Treasury has indicated that the upcoming March budget will have a strong focus on skills, notably on apprenticeships and the upskilling of existing workers.

Andrew Eldred, ECA director of employment and skills, commented: “National Apprenticeship Week is a time for celebrating apprentices and the businesses who invest in employing and training them.

“At the same time, we cannot afford to ignore the worsening shortfall in funding available to small firms outside the scope of the apprenticeship levy. The cat is now out of the bag, with the Institute for Apprenticeship’s own chief executive calling for an extra £750 million for non-levy employers. In fact, according to the Association of Employment and Learning Providers, we need double this amount.

“The electrotechnical sector currently creates over 6,000 apprenticeships annually, the vast majority recruited and trained by small employers. If the Government is to have any chance of meeting its policy objectives on public infrastructure, housing, green energy, digitalisation and building safety, then this number needs to be even bigger. Prolonged uncertainty about non-levy funding is putting all this at risk.”

The number of apprentices currently recruited each year is insufficient to meet projected demands, according to the Electrotechnical Skills Partnership (TESP). Research suggests that even if an extra 5,000 new apprentices qualified by 2023 (representing a 33% increase), this would still leave a shortfall of 7,500-10,000 electricians.

A labour market report on the electrotechnical industry carried out by TESP in 2019 estimated that between 12,500 and 15,000 additional skilled electricians will be needed over the next five years to accommodate forecasted growth.

National Apprenticeship Week is taking place from 3 to 9 February 2020.