Cut the cost and admin burden of apprenticeship levy, CBI urges

The apprenticeship levy will place a significant financial burden on employers with no real improvements to training provision, the head of the Confederation of British Industry has warned.

In a letter to the business secretary Sajid Javid, director-general of the CBI Carolyn Fairbairn urged the government to reconsider the rules on the levy to reduce the costs for employers.

She said that employers should be able to claim back “allowable expenses” on some of the costs involved in running apprenticeships. The government should also find ways to slash the administrative burden for small firms.

In addition, larger businesses with higher apprenticeship bills should have more freedom on how they spend the money, the letter said.


Training must be valuable

Announced in last summer’s budget, the apprenticeship levy will see businesses with a payroll in excess of £3million taxed at 0.5 per cent from 2017, in order to fund the government’s proposed three million apprenticeships by 2020.

While the CBI has met the levy with criticism, Fairbairn commented that “if it is to be successful in providing the higher rates of training we all want to see, the levy system must ensure training is relevant and valuable to businesses”.

“For over a decade, businesses have been promised more influence over the qualifications on offer in the in-work education system — but programmes have changed too regularly, and government-inspired red tape has made the system difficult to deal with,” she added.

Furthermore, the letter said, in order to ensure good career prospects for trainees, level 3 and 4 apprenticeships should be nurtured, rather than just GCSE-equivalent level 2 qualifications.


Driving up quality

Responding, Javid said: “Employers need to be in charge of driving up the quality of apprenticeships so that our young people get the skills they need. We will continue to work with the CBI and others to turn round the 20-year decline in training investment.

“The apprenticeship levy will ensure that businesses invest in skills and training and will act as a much-needed shot in the arm for the country’s productivity.”