The Construction Alliance blog

Employers will pay 0.5% of their overall wage bill into a central fund, which will be used to encourage greater apprenticeship intake across the country. The National Federation of Builders (NFB) continues to welcome all attempts towards tackling the shortage of skilled workers, especially in the construction industry. In this sector, we have always believed that fostering collaboration between educational institutions and local SMEs is essential in order to promote a sustainable skills strategy. While the question of whether an apprenticeship strategy driven purely by an arbitrary number, that is the three million apprenticeship starts, can also guarantee quality apprenticeships is a debate for another day, we do need assurances over how SMEs will fund apprenticeship training.

I was therefore surprised when Nick Boles, the skills minister, explained that smaller businesses will receive apprenticeship funding coming from leftovers, after larger companies have used up their share of the fund. Boles specifically said: "While it will be possible for any employer who pays the levy to use their contribution on their own apprenticeship across the economy we don't expect all employers to use all their money. The levy money that is not used by those employers who have paid it will then effectively be recycled to support the apprenticeships of those employers who don't pay the levy."

The admission that smaller firms are going to see funds reassigned to them after large companies have taken their share of apprenticeship funding is shocking. What we need is an approach that brings together educational institutions and local businesses - especially SMEs. They have a better understanding of their own regional requirements and are appropriately equipped to supply much-needed local training and skills. Much progress has already been made through initiatives such as the National High Speed Rail Training Colleges in Doncaster and Birmingham and the Advanced Manufacturing in Sheffield. We need to maintain momentum by making sure that construction SMEs are at the forefront of this skills drive by putting them in the best possible condition to do so.

When I started my term as national chair of the NFB, I said that we need to harness the billions of pounds of planned public infrastructure work to invest in training young people and re-training experienced workers. Not to be too blunt, but this objective will not be achievable if Mr Boles' statement is any indication of the government's position.

"Don't sideline SMEs on skills" says NFB national chair