Further reform urgently needed for effective Apprenticeship Levy says CBI 27 September 2019
The CBI is asking the Government to do as it has previously promised and urgently consult businesses about the Apprenticeship Levy’s future.
According to a new Confederation of British Industry (CBI) report, ‘Learning on the job: Improving the Apprenticeship Levy’, urgent steps must be taken by Government to reform the Apprenticeship Levy in England, so firms can offer more of the high-quality training they need to succeed. The CBI says that firms have welcomed recent Government efforts to evolve the Apprenticeship Levy and employers invest over £44 billion a year in skills training and are passionate supporters of apprenticeships. However, two years on from the system’s introduction, the overall number of apprenticeships starts remains significantly low. With growing financial pressure raising questions about the sustainability of the Apprenticeship Levy, the Government must now urgently launch its promised public consultation on Levy plans after 2020 – which is only three months away.
CBI recommendations for reform include:
Increase transparency around Levy receipts and expenditure Enabling firms to better understand how the Levy system is working, what’s being funded by the Government and how their contributions are being spent Make the Levy system more user-friendly Engage smaller firms with practical, online support and locally-led ‘matching services’ which allow large firms to pass on unused funds Creating a sustainable financial plan for the Levy budget Introduce a £100 million annual Government top-up to the Levy budget – so that Levy payers and SME non-Levy payers can continue using the scheme to spend on apprentices of all ages and skill levels Opening up conversations about the future of the Levy Government should urgently fulfil its commitment to publicly consult on options after 2020 - including broadening the Apprenticeship Levy into a ‘Flexible Skills Levy’, which would cover a wider range of high-quality, relevant training.
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Research suggests apprenticeship levy rules need to be adjusted 4 November 2019
Research suggests that current apprenticeship levy rules will lead to a decrease in apprenticeships in SMEs.
The Learning and Work Institute has published a report that has resulted in the warning that current apprenticeship levy policies could potentially result in a reduction in the number of apprenticeships that are offered by Small and Medium Enterprises (SMEs). The research points out that, since the introduction of the Apprenticeship Levy in 2017, the number of apprenticeship starts have fallen by a substantial 20%. There has been a growing trend for enrolling older and pre-established staff on higher level courses, which are more costly. This could mean that the apprenticeship budget is in deficit very soon, which, could, in turn, have a detrimental effect on the funding provided to smaller organisations, who are not eligible to pay the Apprenticeship Levy. There are fears that the funds available for those who do not pay the Levy will be restricted as a result of a growing deficit within the budget. The Learning and Work Institute states that the potential effect could be the loss of 75,000 apprenticeships at SMEs. The initial assumption on which the Apprenticeship Levy was founded was that the larger organisations would not utilise their whole levy fund, so the remainder would be available for SMEs who did not pay the levy. This presumption was unfortunately incorrect, with larger organisations opting to use higher proportions of the funds available to them, and investing in the higher level, more expensive courses for their staff.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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