AELP responds to apprenticeship budget announcement

The apprenticeship community has begun to give their responses to George Osborne’s summer budget. Here, the AELP give their verdict on apprenticeship levy and the rise in the national minimum wage.

On 8th July, George Osborne gave the Conservative party’s first budget speech in over 20 years. During his speech in the House of Commons, Osborne promised to transform Britain into a ‘‘higher wage, lower tax, lower welfare’’ country.

Apprenticeships were high on the agenda, with the Chancellor pledging to impose an apprenticeship tax on all large firms. Osborne also announced that the national minimum wage will rise to £7.20 an hour from April 2016, and then rise to £9 an hour by 2020.

Now the Association of Employment and Learning Providers (AELP) has given its response to the governments financial proposals.

Apprenticeship levy

‘‘For skills and in particular Apprenticeships, the government has announced that all large employers will pay a levy to fund the Apprenticeship programme.’’

‘‘It is very unclear how this levy will work, who will pay it and what it will fund.  Without knowing that detail, it is impossible to say whether it will work and increase productivity across employers of all sizes.’’

‘‘For skills and in particular Apprenticeships, the government has announced that all large employers will pay a levy to fund the Apprenticeship programme.  It is very unclear how this levy will work, who will pay it and what it will fund.  Without knowing that detail, it is impossible to say whether it will work and increase productivity across employers of all sizes.’’

Living Wage

‘‘The changes to the minimum wage will only affect 25 year olds and above.  This means that we may end up with different rates for young apprentices, older apprentices, normal employees up to 21 and then 21 to 24 year olds.’’

‘‘This may mean that employers will be encouraged to recruit young people, especially where there are additional national insurance incentives.  It will be very important to balance any increases in rates for young people with the ability of employers to pay their costs.  This issue has to be reviewed in line with any new proposals for Apprenticeships.’’