CBI: Apprentice levy needs a ‘radical rethink’

CBI DG Carolyn Fairbairn has told an audience of business leaders in London today that the government’s plans for the Apprentice Levy are flawed, and require a radical rethink.

According to Fairhead, “firms are passionate about apprenticeships, and it’s this passion which drives deep frustration over the levy plans as they currently stand.”

The CBI’s main objection to the planned levy, which comes into effect in April of 2017 is that the current plans fail to take into account the needs of business, and rather than creating a “’once-in-a-generation revolution’ in skills, but it is currently only likely to deliver another “once-in-an-administration shake-up.”

“Currently, the levy misunderstands training only as apprenticeships and the current design encourages firms to re-badge their existing programmes,” Fairbairn said.

“Companies are having to change the ‘spec’ of graduate or management training schemes – programmes that are working perfectly well – just to fit apprenticeship standards.

“When it comes to training – business knows best.  They should have the flexibility to choose the kind of training which is right for them, whether it’s labelled an ‘apprenticeship’ or not.

The CBI identified three key factors that will improve the chances of the Levy delivering real benefits:

  • A stronger role for the new Institute for Apprenticeships – include measuring and managing the system around the levy;
  • More flexibility in how firms can spend the levy – including on existing training and high-quality support for apprentices;
  • The digital system which manages levy spend must be ready and able to support the delivery of apprenticeship training which businesses need, in full and from the start.

Commenting on the timing of the levy’s introduction, Fairhead said, “We’re less than 12 months from the levy’s planned start date in April 2017 – and for business, that’s the equivalent of tomorrow. The pressure of the Government’s deadline means that firms lack crucial information about the levy and a realistic lead-in time to prepare for it.

“Today, firms are having to treat the levy as a tax, because the headline cost is all they’re certain of.  Businesses of all sectors and sizes are still in the dark – cutting-corners isn’t in anyone’s interest.

“Government needs to work with business to resolve these issues before the levy launches. This means taking the time to get this right to design a flexible, business-led system – through the Institute – that encourages employers to spend on quality training opportunities.”