Apprentice Levy gets mixed food and drink industry reaction

21-Dec-2015 - Last updated on 21-Dec-2015 at 11:32 GMT

The new Apprenticeship Levy has sparked a mixed industry reaction

The Apprentice Levy, announced in chancellor George Osborne’s Autumn Statement, has received a mixed reaction from industry groups – ranging from cautious praise to fears about its impact on apprenticeship recruitment.

The levy, effective from April 2017, will be set at a rate of 0.5% of an employer’s pay bill. Employers will receive an allowance of £15,000 to offset against their levy payment. That means it will be paid on any pay bill of more than £3M – making less than 2% of UK employers will eligible for payments.

Target of 3M apprenticeships

The levy will raise £3bn by 2019/20 – doubling the level of spending since 2010-11 – and help to achieve the target of 3M apprenticeships by 2020, said the National Skills Academy for Food & Drink (NSAF&D).

Offering a cautious welcome to the levy, NSAF&D chief executive Justine Fosh said: “This heralds a new era for apprenticeships in the UK.”

“Despite being the largest manufacturing sector in the UK, with the need to recruit more than 100,000 new people into the industry, historically we have under-invested in apprenticeships, so this levy is a positive move to increase the numbers dramatically,” said Fosh.

“However, it is not all about numbers and with the development of new Trailblazer apprenticeships due to launch early in 2016, industry can be reassured that high quality and relevant apprenticeships will available.”

The levy will put control of apprenticeship funding in the hands of employers and will encourage employers to invest in their apprentices and take on more, she added.

Apprenticeship Levy

“This heralds a new era for apprenticeships in the UK.”

Justine Fosh, NSAF&D

“Employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay into the levy, through a top-up to their digital accounts. All employers who do not pay the levy will be able to access government support for apprenticeships.”

But the Food and Drink Federation (FDF) director general Ian Wright worried about the impact of the levy on big businesses.

“Growing apprenticeship numbers is a key ambition for the UK food and drink industry,” said Wright. “Reform is needed to make this route more attractive, and an apprenticeship levy system that is proportionate, simple and works for businesses of all sizes will be a key ingredient in achieving this.

‘Hit company investment pots for staff training’

“The rate announced … will be a cause of concern for larger businesses, and may hit company investment pots for staff training and, perversely, new apprenticeship starts.”

Growing apprenticeship numbers was a key ambition for the UK food and drink industry, he added. Reform was needed to make the apprenticeship route more attractive. “An apprenticeship levy system that is proportionate, simple and works for businesses of all sizes will be a key ingredient in achieving this.”

Wright looked forward to working with the new levy board to ensure “due attention is paid to improving the quality of apprenticeships, not just increasing the volume”.