Apprenticeship Levy is ‘poorly designed’

By Gwen Ridler

- Last updated on GMT

New Apprenticeship Levy proposals have been called 'poorly designed' by business leaders
New Apprenticeship Levy proposals have been called 'poorly designed' by business leaders

Related tags Apprenticeship levy Apprenticeship Vocational education

The Apprenticeship Levy is at risk of “turning back the clock” on progress and is “poorly designed” according to business leaders, as the government launched a consultation on the funding of the levy.

The new proposals included a revised start date for the levy ­– May 1 2017 – as well as the different funding bands.

The new plans also included support schemes for small employers training 16–­18 year olds and extra support for apprentices aged 19–24 who are leaving care.

The new plans were intended to simplify the process in which funding was awarded for apprenticeship schemes.

Employers have until September 5 to make their views on the levy known.

‘Poorly designed’

CBI director general Carolyn Fairbairn said that while the organisation welcomed the government’s focus on apprenticeships, the levy was poorly designed.

The Apprenticeship Levy, in its current form, risks turning the clock back on recent progress through poor design and rushed timescales,” ​said Fairbairn.

“Without a radical rethink it could damage not raise training quality. This really matters because of the crucial importance of closing the skills gap to improving the UK’s lagging productivity.

“The government must take time to get this right, and listen properly to the concerns and ideas of the businesses who will be doing their best to make it work.”

The government’s focus on apprenticeships was also praised by EEF, the manufacturers’ organisation. But it too questioned the design of the levy.

‘True and fair’

Ceo of the EEF Terry Scuoler said that the funding bands of the manufacturing and engineering apprenticeships were “true and fair reflection of the cost of training”.

However, Scuoler questioned how adaptable the levy would be.

Question marks still remain over the design of the new levy system,” ​said Scuoler.

“Employers will want to see a commitment from government that the system will evolve and respond to employer needs, not just in the lead up to the implementation date but, importantly, also afterwards.”

Meanwhile, corporate affairs director at the Food and Drink Federation (FDF) Tim Rycroft said that the government needed to get “apprenticeship funding right​” to combat the skills gap.

“As it stands, the proposed Apprenticeship Levy is not fully developed and not ready for implementation in less than eight months,”​ said Rycroft.

“In the wake of the vote to leave the EU, there is no question that it would add unwelcome additional burdens on hard-pressed industry at a moment of crisis.

“We are also pleased to see that employers will now be able to fund apprenticeships based on their main place of work, rather than where they live.

However, there are still areas which need a rethink. We join other business voices in urging the new secretary of state to listen to industry, delay the levy’s introduction, and work with us to make it fit for purpose.”

Apprenticeship Levy key points

  • Start date for the new system
  • Funding bands
  • Simpler funding system for apprenticeship frameworks
  • Co-investment rate
  • Support for small employers training 16–18 year olds
  • Extra support for apprentices aged 16–18 years of age
  • Support 19–24-year-olds leaving care
  • Support for those who have an education, health and care plan
  • Support for English and maths training
  • Learning support
  • Cross-border training
  • Re-training
  • Transferring of digital funds

Read the full report here

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