Government should “radically rethink” apprentice training levy

1027

The CBI has called on the government to “radically rethink” the apprenticeship training levy, due to come into force next year…

The apprenticeship levy should be reconsidered before it comes into force next year, according to the UK’s largest business lobby group. The Confederation of British Industry said the government needed to “radically rethink” the plans, as there are major concerns over the viability of the system.

Director-general of the CBI Carolyn Fairbairn said: “Firms want to create quality apprenticeships and they’re ready to work with the government to do this. But as it stands that’s not what the levy is doing,” she will tell a City of London audience.

“The government has the opportunity to create a once-in-a-generation revolution in skills, but it is currently only likely to deliver another once-in-an-administration shake-up.”

The apprenticeship levy will see businesses with a pay bill of £3m or more cough up 0.5 per cent payroll tax towards funding the levy. An allowance will then be paid to employers to offset the levy and for training.

Businesses have expressed concerns over the plan, which they deem rushed and poorly thought-out.

The government is aiming to create three million apprenticeships by 2020. However, research from the Financial Times revealed in February that more than 30 per cent of people who embark on an apprenticeship training programme fail to complete them.

“The levy misunderstands training only as apprenticeships and the current design encourages firms to rebadge their existing programmes,” Fairbairn said.

“Other levy systems in Ireland, Germany, Denmark, France and Quebec give greater flexibility on spending than the UK government is proposing. So it can be done — and this is how our levy should work too.”

The CBI wants to see the following implemented by government:

  • A stronger role for the new Institute for Apprenticeships – include measuring and managing the system around the levy;
  • More flexibility in how firms can spend the levy – including on existing training and high-quality support for apprentices;
  • The digital system which manages levy spend must be ready and able to support the delivery of apprenticeship training which businesses need, in full and from the start.

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