Summer Budget 2015 saw a commitment from the Government to create 3 million new apprentice starts by the end of this Parliament. In his speech the Chancellor stated: “The most successful and productive economies in the world are committed to developing vocational skills. That is why this government has committed to significantly increase the quantity and quality of apprenticeships in England to 3 million starts this Parliament, putting control of funding in the hands of employers.”
The apprenticeship schemes will be funded by introducing a levy of 0.5% payable by all large UK employers. The aim of this is to “reverse the long-term trend employer underinvestment in training”. Government support will be available for those employers who do not pay the levy.
Employers will be able to claim an allowance of up to £15,000 which they can offset against the levy and will also be able to provide their own fully funded apprenticeships.
The Apprenticeship Levy is due to come into operation from April 2017.
In a recent speech, CBI Director-General Carolyn Fairbairn, highlighted that businesses are committed to raising skill levels and support the Government’s ambition to boost apprentice numbers, but that there are growing concerns among firms about the current design and viability of the system. She warned that 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.”
Whilst “firms are passionate about apprenticeships, and it’s this passion which drives deep frustration over the levy plans as they currently stand.” And that the Government must “take the time to draw on business' vast experience to make sure that the levy works for everyone, rather than rushing out a poorly thought through plan. This isn’t what businesses want, and we don’t believe it is what Government wants either."
The CBI is calling for:
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.On the design of the Apprenticeship Levy, Carolyn added: - The Institute for Apprenticeships
“The Institute risks being an afterthought, a mere ‘standard-setter’, rubber-stamping standards in a system where key decisions have already been made. Instead of this, we think the Institute should be a ‘standard-bearer’, with the authority to shape big decisions on design.
“It is also placing the value of apprenticeships only in ‘off-the-job’ training, restricting eligible spend to training with an external provider. It risks devaluing the very thing that makes apprenticeships great. Learning in work, on the job, from someone who knows the ropes. CBI Director-General Carolyn Fairbairn, highlights that businesses are committed to raising skill levels and support the Government’s ambition to boost apprentice numbers, but that there are growing concerns among firms about the current design and viability of the system.
The DG says that 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 CBI is calling for:
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.The full detail of the CBI Press Release can be found here.
