In a significant move to bolster small businesses and enhance workforce skills, the Prime Minister announced a comprehensive reform package at the Business Connect conference in Warwickshire in March.
Aimed at boosting apprenticeships and slashing bureaucratic hurdles, these reforms are part of the Government's first economic declaration since the Spring Budget.
Central to the reform is a £60 million investment earmarked to support the creation of up to 20,000 additional apprenticeships. This initiative is designed to benefit young individuals and small businesses by fully funding apprenticeship training costs for people up to the age of 21. The decision to cover these costs directly alleviates the financial burden on small businesses and simplifies the funding process for training providers, such as further education colleges.
From April, another change will see the increase in the percentage of apprenticeship levy funds that large businesses can transfer to other companies. Currently, a levy-paying employer can allocate up to 25% of their unused levy towards funding apprenticeships in another business. The new policy will double this allowance to 50%, enabling small to medium-sized enterprises (SMEs) to hire more apprentices by reducing their costs and facilitating access to a skilled workforce.
This announcement follows a successful uptake by numerous large levy-paying employers, who have collectively pledged to transfer over £35.39m to support apprenticeships in businesses of all sizes since September 2021. Such measures are indicative of the Government's commitment to fostering a robust economy and providing young people with the necessary skills to thrive.
Beyond the apprenticeship reforms, the Prime Minister also unveiled plans to significantly reduce regulatory burdens on thousands of small businesses. This includes proposals to save businesses around £150m per year through the removal of unnecessary red tape, leveraging Brexit freedoms. A new task force aimed at boosting private investment in women-led businesses was announced, with ambitions to position the UK as the leading global environment for female entrepreneurs.
Further deregulatory measures are set to simplify reporting requirements for SMEs, anticipated to deliver an annual saving of approximately £150m across the sector. A notable change will see the adjustment of thresholds that define the size of a company, potentially benefiting up to 132,000 businesses by exempting them from certain non-financial reporting obligations. These adjustments are facilitated by the UK's departure from the EU, allowing for a more tailored approach to meet the needs of British businesses.
The Government's commitment to modernising business practices is further evidenced by the elimination of redundant EU reporting requirements and the encouragement of digital annual reports over paper copies. These changes are poised to save small businesses at least 1 million hours annually in reporting time.
Looking ahead, the Government plans to consult on additional changes that could further reduce the reporting burden on medium-sized companies and possibly reclassify an additional 1,000 large companies as SMEs by adjusting employee size thresholds.
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."
Talk to us about your business.
