UK to fully fund apprenticeships in potential blow to border businesses

The move will likely put construction firms and engineering business in Northern Ireland at an advantage. Photo: Getty

Donal O'Donovan

Construction and engineering firms in Ireland’s border counties look set to come under increased recruitment strain as the UK moves to fully underwrite the cost of apprenticeships.

The UK government will fully fund apprenticeships in small businesses for people under 21-years-old starting next month, in a bid to increase the number of skilled workers in an economy still suffering from high levels of inactivity among the young.

That looks set to put the likes of construction firms, engineering business and even services sector businesses like hairdressers in Northern Ireland at an advantage, cutting their labour costs and potentially helping them to attract a greater share of apprentices from south of the Border to serve their time with business in the North.

The initiative – which Prime Minister Rishi Sunak announced yesterday – forms part of a package of new funding for apprenticeships that will cost about £60m (€70m) and enable as many as 20,000 extra training places, the UK government said.

The British government also pledged to bring in measures to simplify reporting for small and medium-sized businesses, which it says will save thousands of businesses across the UK around £150m per year.

Mr Sunak will also unveil an “Invest in Women Taskforce” to help unlock investment for female business leaders.

The task force will aim to raise a funding pot for female-founded businesses through private capital.

The Irish Government hiked its funding for the apprenticeship system last year, providing €67m in Budget 2024 in core and temporary funding as part of a target to increase the number of craft apprenticeship from 13,000 places in 2022 to over 16,000 places this year. 

The UK move to directly fund the hiring of apprentices by SMEs in Britain ups the ante, however, at a time when small Irish employers are facing higher direct and indirect labour costs as a result of a series of governmental measures including around leave entitlements, pensions and the minimum wage.

A shortage of apprentices in key construction trades including plumbing, electrical and carpentry have been identified as a significant impediment to meeting current and future housing targets.