In one year, the tax on apprenticeships work?

As anniversaries go, first asked levy, the government may wish to forget. To address the problem of skills shortages, requiring enterprises with annual wage bills of £ 3M or more to pay 0.5 PC of their salary costs to Fund the training that they can draw on the charges faced serious criticism since its launch in April last year.

Complaints include its overly bureaucratic and inflexible, and it was launched without the necessary mechanisms for a function this means that he actually postponed the companies on the students. Others say it’s just a tax on business, and is unlikely to deliver the skills needs.

Official data show complaints may be justified. In the first quarter after the introduction of the collection, was 60pc plunge in the number of people starting training as companies struggled to cope with the new system. The decline eased, but hopes that the levy, which covers 20 000 enterprises and attract more than £ 2bn a year to fix the lack of skills seem misplaced.

The data obtained in the framework of the act on freedom of information, the Open University, found that of £1.39 billion paid in levy to the English business, for only £108 m was drawn down, indicating that employers are struggling to fit into this system. “It’s an absolute disaster,” says Alan Tuohy, managing Director of Playfords Construction services. “It’s not so much a tax as the scheme of utilization of money. In the past I spoke of the preparation of the bodies we wanted to take on students, they have provided us an interview and we’ll take who we wanted. All we had to pay for them and send them to College one day a week. The residue was treated for us training bodies.

Students receive education

Monty Rakusen

“Now we have to pay tax, coach-invoices with us and we affirm it against electronic vouchers. The boss of Cambridge-based engineer, which has 110 employees, he added: “there are a lot of businesses that just can’t go through with it. This fiasco”.

Chancellor Philip Hammond acknowledged the issue in its spring statement, saying, £80m will be forwarded to SMEs to help them find their way through the system.

Twohy also believes that in all sectors, collection risks of the devaluation of the apprenticeship. “Teaching should be related to a serious career, which produce craftsmen and women. With all the to pay for it, you get big companies creating training in such things as customer service and cleaning because they can create their own workouts to make sure that they get back what they pay for. These jobs are necessary, but they do discipleship?”

With all the to pay for it, you get big companies creating training in such things as customer service and cleaning because they can create their own workouts to make sure that they get back what they pay for. These jobs are necessary, but they do discipleship?

Although the principle of increasing the level of training is right, TUI thinks levy risks becoming a “big setback for the industry, but a huge success for the government, because it can keep all the unspent money.”

Engineering and manufacturing has long been the heartland for learning and this is one of those sectors that some of the harshest criticism of Levi came.

“The promise was that Levi would be employer-Led and companies will have purchasing power,” says Verity Davidge, head of skills and policy in the design and manufacturing trade body EEF. “They will pay, and then return the money to spend on the skills that they wanted. This could be very good, but this did not happen.”

Key issues identified include EEF funding levy is not covering the high cost of training in technical areas. The maximum funding will be spent per pupil does not exceed £27,000, but some firms believe they are spending £100,000 on training.

What is it? | Apprenticeship Levy

Another issue is that the new standard apprenticeship programs, doesn’t mean they may not spend money on levy. The problem is particularly acute in the major sectors of cost, such as engineering and construction, where the initial resources needed to create a new training program can be a obstacle. “It’s much easier to prepare the body to reduce overall cost and reduce the risk of discipleship than to offer a four-year engineering apprenticeship which has high initial costs,” says Davidge, adding that according to levy, the educational institution pays the monthly contributions.

WEF is not just a body to report problems. The Institute of Directors approves its composition having no such problems, and both groups are also concerned about the 24-month limit, the enterprise must require the money they paid in fees or risk losing them.

“For many companies, the training standards will not be in place within 24 months, so they will lose their money,” says Seamus Nevin, head of the IOD policy studies. “Another change that needs to be done is to increase 10pcs limit on the number of payers of fees can pass,” he says.

Being able to shift the tax would also solve the problem that learning usually needs to be focused around major centres, and some regions not having anywhere to spend money.


And not just to criticize, EEF, IOD and propose measures to make the collection work. Their proposals include a check of maximum funding and incentives to encourage training in areas where the UK has specific skills shortages, such as science, technology, engineering and mathematics. Other solutions include allowing employers and trainers to coordinate their own schedules, are able to convey more than what they pay in other companies and ending time, this means they could see your contribution in the collection effectively evaporate.

Not only in engineering and manufacturing, which Levi is a concern. As some of the largest private employers in the country, supermarkets are in the system. According to the British retail consortium (BRC) says its members pay £180 million a year in levy, but it actually costs them more than fifth. This is due to the current training needs, 20pcs spend their time in training – often in College – means that companies need to find people to “backfill” the work that they released the equivalent of one day a week. The Executive Director of the BRC Helen Dickinson said: “without the additional flexibility that these funds can be spent on, retailers are unable to fully engage in politics”.

DBK is not alone in questioning the requirement of 20pcs, with others arguing that arbitrary level and much relevant training can be carried out in the business. For all the criticism, the business is not fundamentally opposed to level.

“Employers support it by and large,” says Nevin at the IOD. “It’s not fundamental reform, but tweaks that are needed. The government assumes that the business says they don’t want to pay.”

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WEF Davidge agrees that education funding, however, can only be a good thing for the economy as a whole, it will be in those areas where the UK has a shortage of qualified personnel, not light weight training to hit the government target of 3M people starting an apprenticeship by 2020.

“Employers said they would be responsible for their own destiny with Levi,” she says. “Nobody wants to be told what they can buy, but it is what it is. Without change it can bring more harm than good – employers should be given control”.

One company takes a more positive view of Levi Shropshire-engineer at Grainger & Worrall.

James Grainger, Director of the family business, which has 700 employees, says: “It may require some changes, but where are we going as a country if we don’t do this? There was a gap of generations in the learning process. The more companies accept it, the better for the country as a whole.”