By Kate Brown
The government introduced the Apprenticeship Levy in April 2017 in order to increase the quantity and quality of apprenticeships. Since then, employers with a pay bill of over £3million per annum were required to pay 0.5% of their annual payroll into the Levy whereby the funds will be used to pay for new apprenticeships. The government also committed to creating an additional three million apprenticeships by 2020, and the Levy will help support this. The government estimates the Levy will raise £2.8billion in 2018.
However, according to the British Chambers of Commerce (BCC) the Apprenticeship Levy is causing “confusion and frustration” among employers and must be reformed. Head of skills at the BCC, Jane Gratton, is due to announce in a conference on apprenticeships that the scheme is currently “unfit for purpose”. Many firms are finding it difficult to engage with the Levy system because of its complexity and that it is regarded as another tax.
Since the introduction of the Apprenticeship Levy, the number of new apprenticeships has fallen by a staggering 25%. In a poll conducted by the Chartered Institute of Personnel and Development, only 17% of 1,000 Levy-paying firms support the existing Apprenticeship Levy. Moreover, more than half (53%) who pay the Apprenticeship Levy would prefer a training Levy.