Empowering the Freelance Economy

Sunak’s gift to small businesses is boost to apprenticeships rather than eliminate IR35

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Prime Minister Rishi Sunak sang the praises of small business owners in a speech this past week. He is pushing for more small business owners to hire apprentices and more funding for female-founded companies. Both policies are positive, but what if your business needs to fast track growth by hiring experienced freelancers? With IR35 still hindering hiring practices, will Sunak’s latest attempt for the Conservative Party to look like the party of business really boost give a boost to the economy?

In a speech aimed at bolstering the economy, Prime Minister Rishi Sunak unveiled what the government is considering a significant package of reforms designed to create more apprenticeship opportunities and ease the burden on small businesses. So, where do the solo self-employed figure into all of these sweeping reforms?

The centrepiece of the announcement is a £60 million investment that is expected to generate up to 20,000 new apprenticeships, with a particular focus on young people and smaller firms. This initiative will fully fund apprenticeships for anyone under 21 in SMEs, significantly reducing costs for businesses and opening doors for young adults seeking to launch their careers.

The announcement follows a Freelance Informer report signifying that solo self-employed businesses must look for alternative ways to grow their businesses through fellow flexible talent, such as hiring university students on an ad hoc basis. .

However, Sunak did not mention what is being done about risky IR35 worker status determinations when it comes to small businesses hiring freelancers. While apprentices are great sources for growth, their training can be time-consuming.

Here are some of the announcements, however, that the PM did make in his speech this week:

Fully Funded Apprenticeships for Young People in SMEs

The government will cover the entire cost of training for apprentices aged 21 and under in small businesses, starting April 1st. This eliminates financial obstacles for employers and simplifies the process for training providers.

Increased Levy Transfers

Businesses that pay the apprenticeship levy can now transfer up to 50% of their unused funds to other companies, including SMEs. This will allow smaller firms to hire more apprentices by reducing costs and attracting skilled workers.

Cutting Red Tape for SMEs

By using what the Conservatives are referring to as Brexit freedoms, the government said it is streamlining regulations and reporting requirements for SMEs. This includes raising the thresholds for companies classified as “small” or “medium-sized,” freeing an estimated 132,000 businesses from unnecessary paperwork. Additionally, duplicative EU reporting requirements are being eliminated, and businesses will have the option to submit digitalised annual reports. These changes are expected to save SMEs a combined £150 million annually.

Focus on Female-Led Businesses

A new industry-led taskforce, “Invest in Women,” is being established to unlock private investment for female entrepreneurs. The taskforce aims to raise dedicated funding for women-founded businesses and address specific challenges they face.

Efforts welcomed but will they propel growth?

Business leaders welcomed the announcements. John Boumphrey, Country Manager of Amazon UK, for example, praised the increased flexibility for levy transfers, while Martin McTague, National Chair of the Federation of Small Businesses, applauded the support for apprenticeships and female entrepreneurs.

Boumphrey said as one of the “UK’s largest creators of apprenticeships” the company welcomed the changes.

He continued, “Amazon has been a successful case study in using the Levy Transfer, committing over £8 million to SMEs since 2021, supporting more than 900 apprenticeships in over 400 businesses. Changes that allow us to transfer more money will be a boost for many SMEs, and the many more apprentices who will have the opportunity to start and build their careers.”

Anthony Impey, Chief Executive of Be The Business and Chair of Apprenticeship Ambassador Network, said: “Small businesses are run by some of the country’s most impressive and resilient people, but they are time poor and need a simple, straight-forward skills offer to access the talent they need to grow their businesses. 

He continued, “These changes will make a real difference in opening up apprenticeships for young people to kick start their careers at a time when small businesses are pushing forward to boost their productivity.”

Martin McTague, National Chair at the Federation of Small Businesses (main story photo), said he also welcomed the news, but again, freelancers and the solo self-employed seem to be overlooked as the solution we already have to boost economic growth.

“We welcome these very important announcements on apprenticeships, as well as other action including helping more women start up in business,” said McTague. “The Prime Minister is right to take decisive steps to support small employers do what they do best, providing jobs and opportunities in their local communities.  

The FSB has campaigned for more levy-paying businesses to be able to transfer their funds to small businesses in their supply chain, and for crucial support on costs. McTague said, “we’re pleased to see the Prime Minister make this intervention.”  

Short on time

McTague sympathises with small business owners who are short in supply when it comes to “time and resources”. He believes increasing the amount of funding for training costs will “help to improve the number of small firms entering the apprenticeship system.”

However, while these efforts will allow small businesses including the solo self-employed to recruit and up-skill people will they have the time to train them? After the training is complete will the apprentices stay the course? Will they be so valuable in boosting the productivity of these businesses that the solo self-employed can afford to make them a permanent hire? While that would be advantageous, is it realistic when the business owners themselves are still held back by IR35 when it comes to who they can do business with?

1 Comment
  1. Roo Calyptus says

    Sunak is “Big Business” personified….think of his association by relationship with Infosys. He doesn’t know or care about the trials and tribulations of a small outfit: if one of us goes to the wall, there are still enough out there to milk. I voted Tory all my life, but NEVER again, I cannot countennace being ruled over by such two-faced pocket-liners. Its no longer “least worse” for the ballot paper, its “anything non-Tory” for me….backed up with a lifelong “Can’t bring myself to vote Labour”

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