Government Initiatives For Economic Development: Employment Allowance And Apprenticeship

Initiatives and their importance in business operations

In any business there are multiple aspects which need adequate attention. The operations of the business organisation are dependent on the initiatives that are taken by the organisation to prioritize some of their operations over the others. Every business has a pre-decided direction which it needs to take. There is a requirement for taking suitable initiatives so that the organisation can move towards their business goals and improve their performances (Storey, 2016). A business initiative will be a subset of the vision of the organisation. In the following paper, there are two significant initiatives: employment allowance and apprenticeship which the government needs to take for development of the businesses within the economy. The pros and cons of such initiatives shave been discussed in details and the conclusion is drawn based on situational analysis.

There are many initiatives of the government which can have a significant influence on the business and working population.

Employment Allowance is such an initiative in which the National Insurance (NI) of the employer will be reduced up to an amount of £3,000 each year. This is however applicable to certain employees and certain cases. The employees can claim up to £3,000 every year during tax payment. This claim is against the Class 1 National Insurance (Grover, 2015). The employees of a business organisation or a charitable organisation claim are eligible to make this claim. The claim can be made through the payroll of the employee.

There are several advantages of the employment allowance scheme. The basic idea for taking this initiative on the part of the government in the United Kingdom was to help and encourage the small business organisations to create more employment opportunities by employing more people in their organisation Ward and Rhodes, 2014). The employer can take the advantage of employing more staff as they can actually reduce £3,000 of their National Insurance payment during each tax year. The limit earlier on this employment allowance was £2,000 which then was raised to £3,000. This change was brought about from April 6, 2016. The main benefit of implementing the employment allowance is that many employable people get a job opportunity. The employers can also save on a lot of their tax payments. The major advantages of employment allowance are reduction of the NI and the flow of cash. This scheme is seen as an employment funding initiative which helps in social welfare.

Most of the claimants of the employment allowance are of the view that there are no disadvantages of the scheme. However, there is one major drawback of the scheme which is its applicability to only the current tax year (WarrenGarthwaite and Bambra, 2014). There are some people who are of the view that the scheme had a very low response level.  

Employment Allowance Scheme

The employment allowance can be made more beneficial and impactful by making much more people aware of the scheme. They should know how to claim the allowance and what would be the further benefits of their claim. It is also important to make the employers and employees aware of who can claim the allowance

Apprenticeship is a very useful initiative which helps the people of United Kingdom to get updated with the latest job processes.  There are many new generation jobs or practices which the employees need to know or learn. Thus the working population needs to get opportunities so that they can learn the art of the profession or trade through on job training (Parey, 2016). This makes them more job-oriented and eligible for the new jobs that are being generated. There are certain professions which need a license for practice. The apprenticeship helps the people to gain this required license. 

There are several advantages of apprenticeship. The most important is the advanced training which is provided to the employees and professionals. The on job training is the first hand experience which later helps the employees in their jobs. This apprenticeship as a government initiative is very significant as it will enhance the employability of the working population (Ainley and Rainbird, 2014). The initiative makes better workers and professionals with adequate training and skills. The employers also benefit from this initiative as they get to hire more productive and skilled employees. The employers providing apprenticeships can get access to the government funds which can cover some parts of the expenditure made on training of the apprentices. For each employee the business organisation gets £1,500. The business organisation grows contributing more to the economic growth of the nation.

There are certain disadvantages of the initiative. The main problem associated with this scheme is that those who avail the scheme focus more on a particular industry and lose the job options arising in the other sectors. The apprentices also get less paid than the other employees who are experienced (Fuller and Unwin, 2014).  The apprentices are put under immense work pressure and they tend to be more accountable to the supervisors than the other employees who are hired by the firms. The apprentices are paid minimum salaries for their work. The business organisation has to give time and effort towards implementing apprenticeship. The initiative needs commitment towards it for at least one complete year. The business organisation has to make efforts to sustain the interests of the apprentices so that do not lose their enthusiasm and interest in their given jobs.

Advantages and disadvantages of Employment Allowance

It is seen that as a social initiative the apprenticeship has more advantages than disadvantages but the scheme can be improved by making it more job appropriate. The apprentices must not get confined to a particular type of job in a specific sector (Muehlemann and Wolter, 2014). They should take apprenticeship as a gateway to the global employment market. After the apprenticeship, these professionals can be better at their respective works.

In the United Kingdom, doing a business can be very advantageous. The government has taken such initiatives which are not only benefitting and encouraging the employees or the working population to apply for jobs and preparing themselves for jobs but also facilitating the business of various organisations. The government is providing the opportunity for having greater employee loyalty at work. The businesses are getting sufficient funds which can help the business to grow and the employees to be more useful to the organisation for which they are working. The government is creating many jobs through the employment allowance which helps the small to medium business organisations to write off a part of their taxes (Goss, 2015). Angel investors and StartUp Britain are some of the campaigns which are initiatives towards encouraging entrepreneurship in the United Kingdom. The businesses developing and flourishing in U.K are provided due support from the government so that they sustain in the economy. The government is making adequate expenditures towards job creation and development of the employment market in U.K.

Conclusion:

The two schemes or initiatives which have been discussed here are employment allowance and apprenticeship. After a close analysis of both the initiatives it can be said that the two are interrelated. Employment allowance helps the employers to cut their taxes and recruit more number of employees. This is job creation. However creation of jobs is not enough as the employees need adequate training and skills to sustain their jobs. This opportunity is provided by the apprenticeship schemes. Thus this is an initiative towards enhancement of job quality and productivity of employees at work. The government makes apprenticeship also attractive to the employers in the United Kingdom by providing sufficient funds for training.

Reference:

Ainley, P. and Rainbird, H., 2014. Apprenticeship: Towards a new paradigm of learning. 7^th ed. Abingdon: Routledge.

Fuller, A. and Unwin, L. eds., 2014. Contemporary apprenticeship: International perspectives on an evolving model of learning. 4^th ed. Abingdon: Routledge.

Goss, D., 2015. Small Business and Society (Routledge Revivals). 7^th ed. Abingdon: Routledge.

Grover, C., 2015. Employment and Support Allowance, the ‘summer budget’and less eligible disabled people. Disability & Society, 30(10), pp.1573-1576.

Muehlemann, S. and Wolter, S.C., 2014. Return on investment of apprenticeship systems for enterprises: Evidence from cost-benefit analyses. IZA Journal of Labor Policy, 3(1), p.25.

Parey, M., 2016. Vocational Schooling versus Apprenticeship Training. 5^th ed. London: Sage

Storey, D.J., 2016. Understanding the small business sector. 6^th ed. Abingdon: Routledge.

Ward, M. and Rhodes, C., 2014. Small businesses and the UK economy. 8^th ed. London: Report, House.

Warren, J., Garthwaite, K. and Bambra, C., 2014. After Atos Healthcare: is the Employment and Support Allowance fit for purpose and does the Work Capability Assessment have a future?. Disability & Society, 29(8), pp.1319-1323.