The British Chamber of Commerce (BCC) has called for George Osborne to provide greater clarity on the controversial apprenticeship levy, with many providers and employers putting their plans on hold until the chancellor presents the Autumn Statement and Spending Review.
Greater clarity needed
The organisation has demanded greater clearness over the scale and scope of the proposed apprenticeship levy, which aims to tax large businesses in order to fund three million new apprenticeships by 2020.
In a letter to key ministers, the business group has called on the government to address ambiguity over the levy, which has led many firms to put their investment and training plans on hold.
The BCC is concerned that the apprenticeship levy is effectively an additional ‘payroll tax’ on large firms, to be used by government to reach its apprenticeship target.
Since the announcement of the levy, there has been no further information on how it will work, what the rate will be and how it will be set, or even a definition of what constitutes a ‘large employer’ responsible for paying it. This has led to huge disquiet among small–and medium–sized companies who fear that they may yet fall within the scope of this new tax.
Levy shouldn’t ‘undermine other types of vocational training’
‘‘Businesses want to tackle skills shortages and drive up productivity, but the apprenticeship levy risks having the reverse effect,’’ said Dr Adam Marshall, executive director of Policy at the BCC.
‘‘A lack of clarity around the scope, rate and scale is having a huge impact on business confidence. Many firms have decided to put training and investment on hold, and are concerned about the knock on effects of the levy on their cash flow, existing training schemes, and the bottom line,’’ continued the director.
Marshall added that ‘‘It’s important that this levy doesn’t undermine other types of vocational training, which could be better suited to some businesses.’’
‘‘While businesses back the government’s drive to boost apprenticeships, they have real concerns about the current approach. The government must focus on improving the quality of apprenticeships to make them more attractive to employers, and provide clarity on how they will be paid for as soon as possible.’’