FDF signs letter calling for delayed apprenticeship levy

07-Aug-2016 - Last updated on 08-Aug-2016 at 13:03 GMT

The Apprenticeship Levy must be delayed, said business leaders

Related tags Apprenticeship levy Government

The government’s controversial Apprenticeship Levy should be put on hold, according to a letter signed by the leaders of the Food and Drink Federation and 11 other business groups.

The letter, signed on August 5, called for secretary of state for education Justine Greening to delay the introduction of the levy. It said the levy would “exacerbate the existing squeeze in funding” on the sector, especially after the Brexit vote.

Twelve organisations signed the letter in total, including EEF, the manufacturers’ organisation, the Campaign for Science and Engineering (CaSE), the Institute of Directors and Manufacturing Technologies Association.

Significant cost

Organisations that signed the letter said the levy risked reducing overall apprenticeship quality. They added it would be a significant cost to many of the organisations.

The delayed publication of the levy guidance meant the organisations were even less prepared for the tax, they wrote. The guidance was initially scheduled for a June 2016 release.

CBI and Pearson UK survey on the Apprenticeship Levy:

65% demand increased flexibility to spend levy funds
71% said the levy should cater to individual businesses
45% expected the levy to increase prices or reduce margins
39% expected to cut nonapprenticeship training after the levy’s introduction
17% expected to cut staff numbers to meet levy costs

Chief executive at the EEF Terry Scuoler said: “Our industry is passionate about high quality apprenticeships and we want to see more of them.

“However, if the government pushes ahead with its current timetable for the Apprenticeship Levy, we could see a decline in both the quality and quantity of apprenticeships.”

The letter said the economy’s response to Brexit meant fewer funds would be available for the levy. The organisations suggested postponing the levy’s introduction in the wake of the referendum.

‘The levy should not go ahead’

The organisations wrote: “We urge the government to take a considered pause and work with charities, industry and other stakeholders to ensure that the levy is fit for purpose, until which time the levy should not go ahead.

“We request a meeting at your earliest convenience to discuss the best way forward to ensure we deliver high quality apprenticeships that will genuinely improve skills in the British economy.”

FDF director Ian Wright’s decision to sign the letter followed the release of an FDF report last month that suggested delaying the levy’s introduction. The manifesto suggested a four-point plan for new prime minister Theresa May to maintain the competitiveness of UK food and drink manufacturing.

The FDF also launched a six-step manifesto to ease the effects of Brexit. It said the government needed to provide certainty and reduce burdens, including putting the Apprenticeship Levy on hold.

Meanwhile, the Confederation of British Industry (CBI) and Pearson UK found one in five businesses will need to cut staff in order to cover costs of the levy, according to an industry-wide survey. See box for the results of the survey.