6 May 2014

The NHBF has expressed its strong opposition to government plans to change the way apprenticeships are funded, including forcing small businesses that take on apprentices to pay a proportion of training costs and bear the burden of administering training money.

A government consultation on the plans  (NHBF e-newsletter, April) closed on May 1 and the NHBF polled more than 400 members for their views before making a formal submission.

The survey findings showed almost unanimous opposition to the proposals, with members arguing the plans as they stand are unworkable and will simply stop the recruitment of apprentices in its tracks.

Members urged the government to rethink its decision taken earlier this year that employers, rather than training providers, should be given direct control of apprenticeship funding once new training structures launch next year.

For small businesses the extra bureaucracy and red tape resulting from having to administer and manage this money would be onerous and time-consuming, NHBF members warned.

The idea of an employer cash contribution towards the cost of training and assessment was a particular bone of contention, with the lack of any detail as to what level this contribution is likely to be set at being a particular worry.


As one salon owner put it:

It’s very difficult to make a considered judgement when the government hasn’t released figures on what the employer contribution would be.”


Another added:


If the compulsory cash contribution rate is set too high, small employers will decide they cannot afford to employ apprentices. I employ six apprentices and I wouldn’t be able to do this financially.”


NHBF chief executive Hilary Hall said the government’s parallel reforms to create more employer-led apprenticeships, with hairdressers already acting as “trailblazer” employers, were positive.

But, against the backdrop of tough competition on the high street, the minimum wage rising from this autumn and extra costs expected from pensions auto-enrolment, its funding plans risked undoing all the good work achieved so far.

“We run the risk of derailing a new, better apprenticeship system by imposing unwelcome and unnecessary changes to the funding models. The additional costs and extra administrative burden of these new proposals will reduce the number of salons prepared to take on apprentices – the exact opposite of what the government is looking to achieve,” she said.


Click for the full report of what NHBF members said about the Apprenticeship Funding Reform.

Click for a summary of the proposals  Apprenticeship Funding Reform summary.