Apprenticeship levy should not replace existing funding, ICAEW says

With the Department for Business, Innovation and Skills (BIS) closing its consultation document, the Institute of Chartered Accountants in England and Wales (ICAEW) has joined a number of organisations in questioning the Conservative’s apprenticeship levy.

 

Consultation ‘does not provide key details’

The government department released a consultation document to the public in August, as they looked to gain further insight into how people felt about the Conservative’s plan to create three million new apprenticeships by 2020. The chance to give an opinion over the plans ended on October 2nd.

In a blog post, the Accountancy organisation blasted the Tories’ apprenticeship levy, as it looks to tax larger businesses in order to fund new opportunities for young people.

‘‘The consultation does not provide key details on the scope and rate of the levy, which makes it difficult to comment on how best to implement a new funding model that carries the complex costs of apprenticeships, including recruitment, induction, on the job training, facilities for training, training materials and salaries, all of which differ by size of employer and industry sector,’’ stated the post.

The ICAEW continued its assault on the document by stating that the public funding already in place should not be replaced by the levy, but instead be an addition to it, as the tax could put existing trailblazer initiatives under threat.

 

Businesses already make contributions

The institute then went on to claim that the document seemed to take no notice of the fact that large businesses already make sizeable contributions to certain sectors.

‘‘The consultation seems to disregard the significant contribution that many large businesses, notably in the accountancy sector, already make to improving the skills of the workforce.’’

This sentiment is similar to that of AELP chief exec Stewart Segal, who spoke exclusively to Apprentice Eye last month about his firm’s stance towards the levy.

‘‘Apprenticeships and the development of skills shouldn’t be something that the government charges companies for, because it’s something that companies need to fund themselves – and a vast majority of firms are already doing this,’’ said Segal.

The ICAEW is not the only trade body that’s criticised Cameron and Co. In August, Apprentice Eye reported that The Confederation for British Industry (CBI) released a new briefing paper addressing the levy, calling for Osborne to avoid charging small businesses to fund its apprenticeship scheme.

‘‘Small employers should remain exempt from the levy – but levy funding should not be used to cross-subsidise apprenticeships for small business,’’ said the CBI in a statement.

‘‘The approach being piloted, where the government contributes to the majority of the training costs of apprenticeships, should continue for small firms.’’