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One in six employers will cut apprenticeship places when levy is introduced

CBI survey finds greater impact will be on other forms of training, as lobby groups ask for postponement

29 July 2016
Sonia Rach

A recent report found that one in six businesses plan to cut the number of apprenticeships they offer as a result of the forthcoming apprenticeship levy. Research carried out by the CBI and Pearson suggests that 17% predict a reduction in the number of apprenticeship places available when the levy comes in to force, while 22% expect it will lead to a “downward pressure” on wages.

The apprenticeship levy is set to be introduced from April 2017 and will impose a 0.5% tax on annual payrolls. It has recently emerged that CBI, the manufacturing body EEF, the Charity Finance Group and the Institute of Directors, are coming together and urging the government to postpone the levy for at least another year. They argue that this will allow employers to arrange their plans following Brexit.

According to People Management, Neil Carberry, the CBI’s director for employment and skills said: “The government should take the time to do it right. The system needs to be redesigned, but the schedule for April 2017 is more than tight. April 2018 is probably the right goal.”

 

The CBI survey also revealed that 45% of businesses are planning to create more places for apprenticeship and 39% plan to reduce the amount that they are investing in areas such as training. The report also found that 16% of companies without an apprenticeship programme will create one in the next three years.

 

People Management also reported that Mark Dawe, chief executive of the Association of Employment and Learning Providers, commented: “The government should press ahead with the start of the levy next April. This is vital for achieving its three million target and we’ve made clear to ministers that training providers can and will deliver the three million target for them.”

 

“But it is equally important that the promised new guidance for employers is published now. It’s some of the other aspects of the apprenticeship reforms could be postponed. These include a new register of training providers and the replacement of apprenticeship frameworks by new standards. We’ve also asked the government to think very carefully about demanding up-front cash contributions from non-levy paying SMEs, because we believe this could have a serious impact on the number of smaller businesses that currently offer apprenticeship opportunities.”

 

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