Apprenticeship levy confirmed in summer budget

George Osborne has announced that all large firms will start paying an apprenticeship tax, days after being publicly advised to do so by the government’s skills adviser.

On 8th July, the Chancellor of the Exchequer gave his first budget speech since the Conservative party won May’s General Election.

The future of British apprenticeships was predicted to be high on Osborne’s agenda, with the government recently announcing to create 3m apprenticeships by 2020, a proposal that was met with scepticism by many.

One critic of the government’s plans was skills adviser Professor Lady Alison Wolf. The Kings College professor claimed that ‘‘David Cameron’s talk of improving apprenticeship quality while also having 3m new apprenticeships by 2020 is self-deception, at best. Under current budgets, it simply cannot be done.’’

Wolf, who recently released a government report entitled Fixing a Broken Training System: The case for an apprenticeship levy, called for a 0.5 per cent tax on employers payrolls.

‘‘To rebuild apprenticeship as a robust and credible institution for the long-term it needs a secure funding source. A small but hypothecated payroll levy on businesses is the only simple and robust way to do this,’’ continued Wolf.

It seems that Osborne has taken the professors advice, after announcing plans for an apprenticeship levy on all large businesses during his budget presentation in the House of Commons.

‘‘So we are going to take a radical and frankly overdue approach. We are going to introduce an apprenticeship levy on all large firms,’’ stated Osborne

‘‘Firms that offer apprenticeships can get back more than they put in. Britain’s great businesses are training up the next generation. The money will be directly controlled by employers and we will work with businesses on how to do this.’’

‘‘It’s exactly the sort of bold step we need to take if Britain is going to raise its game.’’