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West Midland's firm's vocational training hopes after 'worse than predicted' budget rises

Bosses at a West Midlands training firm say minimum wage rises announced in the autumn budget statement could give more apprentices a chance to pursue vocational careers over "a quick job".

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Bosses at a West Midlands training firm say minimum wage rises announced in the autumn budget statement could give more apprentices a chance to pursue vocational careers over "a quick job".

The budget announced by UK Chancellor Rachel Reeves on Wednesday (October 30) included an 18 per cent apprentice minimum wage rise to £7.55 an hour, with national minimum wage also set to increase for 18-20 year-olds by £1.40 to £10 an hour from April 2025.

The Government says it will also invest £40 million to help deliver new foundation and shorter apprenticeships in various “key sectors”, although it’s not yet clear whether the £40 million will come from the current apprenticeships budget or is new funding.

And while the rise has sparked concern from some business leaders who have warned it might deter small businesses from taking on apprentices, the move will be good news for workers at the start of their careers who may now be able to choose an apprenticeship over an unskilled job according to Bekki Phillips, Executive Director of Aldridge based In-Comm Training, a specialist provider of apprenticeships and upskilling courses.

"Apprentices have done very well out of the Chancellor’s pay increases with the biggest bump up to £7.55 per hour. This means their annual wage should rise to £14,762 from £12,513, a boost that will hopefully mean they choose vocational training and a long-term career over a quick job in McDonalds," she said.

"Investment in the Industrial Strategy and for key growth sectors is a big one for In-Comm Training, as we do so much with engineering and advanced manufacturing.

"Again, we will need to see the detail, but I just hope that the money doesn’t just go to the big companies at the top of the chain and that it actually filters down to the SMEs"

She added that the much-publicised hike to employer national insurance contributions, which will see the threshold for employers to start paying the tax drop to £5,000 from £9,100, and the rate of contributions rise from 13.8% to 15%, would be a "painful double whammy" on the firm, who currently employs 71 staff across its two technical academies at Telford's T54 Business Park and at the firm's head office in Aldridge.

“The tax rise on business is even worse than many of the commentators were predicting," she added. 

"The NI contributions increase and threshold reduction is a painful double whammy.

"We will need to factor in what this means, but it could certainly curtail some of our investment plans we were planning to make to inject even more new technology into the hands of our learners. From a training perspective, I sincerely hope that the creation of Skills England and the £240m put aside for trailblazer projects will help bring about some much-needed changes with the apprenticeship levy - mainly to help widen what training businesses can access. "

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