By Kate Brown
Apprenticeships are a great opportunity to help people gain the skills and knowledge needed to succeed in a chosen industry. Apprenticeships can provide hands-on training in careers industries such as construction, marketing, business, and sport. Most apprentices are under the age of 25.
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 has 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, total apprenticeship starts between August 2017 and October 2017 saw a 30% drop compared to the previous year with just 114,400 apprenticeship starts (49,800 fewer). According to a survey conducted by the Chartered Institute for Personnel and Development (CIPD), 22% of employers didn’t know whether they had to pay the Levy or not. 46% of employers thought they would be encouraged to “re-badge” existing training schemes as apprenticeships in order to claim the money back.
The Apprenticeship Levy has been criticised by the Institute of Directors who stated that many businesses do not understand the new system and that 1 in 10 of their members wrote the Levy off as tax. In addition, critics state that the new Apprenticeship Levy may discourage employers from taking on apprentices.