Robo Rishi Sunak has little to offer struggling SMEs seeking skilled staff

It is Action Man time again. Faced with terrible polls, no discernible ‘Budget bounce’ and Tory MPs, fearful of losing their jobs in a matter of months, now openly plotting against him, Rishi Sunak seeks to impress that he is very much in charge and he’s above the trivia of British politics . On Monday this week, he sees Barack Obama in Downing Street and the Prime Minister addresses a small business conference in Warwickshire, in the heart of the country. He finds time for a photo shoot, of the sort we’ve seen before, ad nauseam, of Sunak (Winchester College, Oxford, Goldman Sachs) looking earnest and interested on a factory floor as he is shown how a piece of machinery functions. It’s sad and it’s desperate. It smacks, too, of crude propaganda. In his speech Sunak announces the creation of 20,000 apprenticeships and that £60 million ($76 million) is being set aside to cover the cost. He spoke of how these and other measures “will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country”. The BBC and others report it in unquestioningly. Business Secretary Kemi Badenoch is quoted, describing SMEs as the “engines of economic growth”. The government , she said, was committed to doing “all it can to turbocharge small businesses”. According to the latest figures, there are 5.51 million SMEs in the UK. Simple maths say that 20,000 and £60 million will not amount to even the shallowest of ripples across the sector. Where Sunak gets his tidal wave from is not clear. Presumably, he would have said ‘tsunami’ but thought better of it on taste grounds. What is happening here is that late in the day, when there is little public money to go around, ministers have woken up to the importance of apprenticeships. Historically, they were a feature of the working environment – the master teaching his apprentice, passing on his craft. Then they declined with the onset of the Industrial Revolution as bosses objected to the restrictions training contracts imposed. In the early 1960s there was a concerted effort to revitalise apprentice schemes as the UK suffered skill shortages across industry and engineering. Over the next two decades, when they were at their postwar height, pupils would leave school , not go to university and learn a trade . Society thought nothing less of them for it. Many would go on to form their own small businesses with the qualifications they had gained as trainee electricians, plumbers, builders, carpenters and so on. They were the backbone of the local community, core to the economy . Some would grow their firms to substantial sizes, still others would come up with an idea for a new way of doing something, a device that would save time and effort, and make their fortunes. The Sunday Times Rich List was testament to how many of the UK’s most successful entrepreneurs began in this fashion. Apprenticeships formed a vital part of the wealth creation process. Then, views changed. Attending university and gaining a degree became paramount. The universities sector expanded rapidly. All manner of educational institutes were rebranded universities – many of them arguably not suitable for providing that level of education. Degrees were offered in a panoply of subjects – again, many did not lend themselves to concentrated academic study, of the sort demanded by a degree. A decline in apprenticeships that started under Margaret Thatcher was accelerated. Running in parallel was the reduction in manufacturing. Gradually, the realisation set in that not everyone was equipped or willing to go to university; at the same time, employers were complaining of shortages, that recruits lacked the necessary qualifications and experience. What had been a conveyor belt of talent for small to medium enterprises was no more – they were struggling to find the UK staff they required and were looking abroad. In 2017, the Chancellor George Osborne, introduced the ‘apprenticeship levy’, a funding scheme in which employers and government would share the cost of training. It was projected to raise £2.5 billion for the development of apprenticeships. Unfortunately, for reasons best known to them, those charged with devising the framework made it incredibly complex – leading to a deluge of complaints from SMEs that they were having to deal with yet more red tape. Since then, it’s been simplified but only partially – employers still moan it is unnecessarily cumbersome and burdensome. There are now four different types of national apprenticeship, depending on the age, school qualifications and the difficulty of the training. Now that the spotlight has turned to universities and their quality and funding, the popularity of apprenticeships has increased, with more businesses supplying on-the-job training and study. In 2021, the latest year for which figures are available, there were 253,000 people serving as apprentices in the UK. Against this, and the cost, Sunak’s announcement of 20,000 new posts and £60 million appear tiny. Wholesale reform, which is what businesses have been calling for, would be more impactful – but then that would require money and imagination, both of which are in short supply where Sunak’s administration is concerned. His choice of subject for special treatment is correct; the extent of his government’s commitment is nowhere near enough.