Small and medium businesses are asking for financial support from the next government to train more apprentices with AI, cyber security and data skills, according to new research.

Digital apprentice numbers grew by 50% last year - but smaller UK organisations are held back from hiring more because of bureaucracy and funding challenges, the report by BCS, The Chartered Institute for IT found.

Two thirds of businesses (66%) think digital apprenticeships are effective in addressing digital skills gaps in England, according to the BCS study, which includes a YouGov poll.

But more than half (55%) said better financial incentives for employers would make digital apprenticeships more attractive to them and prospective apprentices.

Government grants or tax breaks would be a ‘huge motivator’ to get more digital apprentices into small organisations, the BCS research revealed.

The 5% ‘co-funding’ requirement for non-levy paying organisations to take on apprentices was also found to be a barrier – removing it would reduce the disproportionate impact on small and medium enterprises (SMEs).

The Apprenticeship Levy should be protected, while also reforming those aspects that are not working, BCS added in its ‘Future of Digital Apprenticeships’ report.

For example In England, the Apprenticeship Levy underspend for 2022-23 meant that, since its UK-wide launch in 2017, £2.178 billion of apprenticeship funding was returned by the Department for Education to the Treasury.

Opportunity to prevent significant digital skills shortages

Lucy Ireland, MD of Learning and Development at BCS, The Chartered institute for IT said: “Getting the digital apprentices we need over the next five years relies on convincing more SMEs to take them on, and they need both policy and financial support to do this.

“The next government has a generational opportunity to prevent significant digital skills shortages and drive forward technological innovation.

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“Whilst universities are recruiting strongly to computing degrees, we need a diverse, inclusive range of pathways into the IT profession and the wider digital economy at all levels. That includes helping to re-skill the over 50s, who are also under-represented in tech jobs.”

A copy of the BCS report, ‘Protect. Improve. Grow. The Future of Digital Apprenticeships’ can be viewed here

About the BCS Digital Apprenticeship research

BCS commissioned YouGov to conduct research on its behalf. This research was carried out in two surveys: one conducted between 26 January and 2 February 2024 targeted at 500 HR decision-makers, and one conducted between 18 April and 1 May 2024 targeted at 1,000 HR decision-makers.