FSB: Micro businesses must have a designated Small Business Sector Skills Council

Training is not reaching the smallest firms, FSB survey shows

The UK’s smallest businesses – which make up the majority of the workforce – must be given their own Small Business Sector Skills Council that will focus on the needs of micro-firms, according to the Federation of Small Businesses (FSB).

Micro-firms, with fewer than five employees, are currently being excluded from Government-run training schemes, and are struggling to take advantage of the ‘Train to Gain’ scheme, an FSB survey has found.

Train to Gain aims to help businesses develop the skills of their staff, but many small firms are not aware subsidised training is on offer and the majority of sole traders wrongly believe they do not qualify to apply for training, according to the new FSB survey.

Despite a £350m pot of money being announced in spring this year for the hardest to reach small businesses – which tend to be at the micro end – 88 per cent of respondents to the survey of FSB members said they had not taken up an offer of training through Train to Gain.

The majority (78 per cent) said the scheme needed to be more flexible, and identified the need for training on issues specific to the smallest firms, including leadership and management for businesses with fewer than five employees, and specialised technical and business skills areas that micro businesses operate in. There was also interest in areas such as IT, health and safety, responding to tenders and sales and marketing – crucial business management skills that the smallest firms may not have expertise in.

Only 18 per cent of respondents were even aware that training was available in smaller ‘bite-sized’ chunks, which are so important for small businesses – the majority of which have less than four employees and 2.72million of which are self employed.

Colin Willman, Federation of Small Businesses Education and Skills chairman, said:

“The Government must start to recognise the needs of the country’s smallest businesses, especially during this crucial time when firms need to be investing in skills and training so that they can emerge stronger as they pull the economy out of recession.

“The FSB welcomes extra funding for, and the focus on, small and medium-sized enterprises, as well as the increased flexibility. But much of the Government’s training offer goes over the heads of the hardest to reach small firms because the training available is inappropriate for the majority of the country’s smallest businesses, and because it still isn’t flexible enough. A small business with only two employees needs to be able to train its staff in a way that doesn’t force them to be out of the office for days on end – especially during a recession when the business needs to be functioning on all cylinders. What we really need is dedicated training for the smallest firms, in the form of a new Small Business Sector Skills Council.”

Notes

1. The FSB is the UK’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk

2. The ‘Train to Gain’ survey was carried out in May 2009 with an FSB Skills Panel comprising 292 members. For the full survey, visit www.fsb.org.uk

3. £350 million of funding was announced for Small and Micro Enterprises (SMEs) out of the £1billion Train to Gain budget in October 2008.

The key elements of the £350m Train to Gain package were:

Ø Relaxing the rules to allow funding for ‘bite-sized chunks’ – small units or modules of qualifications in subjects known to be important to SMEs, such as business improvement, team-working, customer service, and risk management;

Ø Extending the leadership and management programme to include companies with just five-10 workers;

Ø Relaxing the rules to allow workers to get training up to level 2 even if they already have a previous qualification at this level; and more funding for level 3 training;

4. There are currently 25 Sector Skills Councils (SSC) and the UK Commission for Employment and Skills (UKCES) is currently undertaking a relicensing of each SSC in 2009.

5. At the start of 2007, 47.5 per cent of private sector enterprise employment was in small enterprises (0-49 employees) – figures according to BERR.