Charities must cough up apprenticeship levy

Charities will not be exempt from the apprenticeship levy, and any money they raise but do not spend could be used by private business, according to the Charity Finance Group (CFG).

The group has claimed that Skills Minister Nick Boles confirmed in a meeting earlier this month that charities would not be granted any special considerations in respect of the levy, reports Third Sector.

The CFG had called the meeting amid concerns surrounding the costs of the scheme and how it would be implemented in the voluntary sector.

 

Ring fencing vetoed

It said, in a written summary of the meeting, that the minister had explained that unspent money would be “redirected and no additional ‘ring fencing’ will be considered”.

In other words, the funds that charities and third sector organisations raise from the levy, but do not spend themselves on apprenticeships, could be passed on to private sector employers. But Mr Boles also confirmed that any organisation would be able to pass on its unspent funds to another organisation it worked with or through its supply chain.

It remains unclear “what the mechanism would be or the amount of time such funds could be rolled over”, the summary says.

The CFG is lobbying for the Institute of Apprenticeships board to include a charity representative, and says that any unspent levy should be ring-fenced for use in the third sector. In addition, it wants charities to be able to spend the levy on development, training and recruitment.

 

‘Significant’ concerns remain

Anjelica Finnegan, senior policy and public affairs officer at the CFG, said: “The meeting was very productive in clarifying the government’s position in relation to how the levy can work for charities, and we have identified areas in which the Department for Business Innovation and Skills and the CFG can work together to help ensure that the levy genuinely works to build skills in the sector.

“However, we still have significant concerns that without introducing greater flexibility for charities – for example, allowing them to use the levy to cover the core costs of employing apprentices and not just on training – there is the very real risk that charities will not be able to spend their levy. This will result in their funds being redirected to other employers, potentially in the private sector.

“If it is found that charitable resources are being redirected to subsidise training in private companies, this could not only undermine public confidence in the policy, but could also lead to a fall in donations as donors question how much of their money is going to their chosen cause.”

A Department for Business, Innovation and Skills spokesperson told Third Sector: “We need to make sure the levy is right for all employers. This is why we are engaging with as many employers as possible to understand how the levy will work for their organisation and giving them the opportunity to work with us on the implementation design.”