Calls to delay and rethink Levy reach new levels

Business concerns over the introduction of the apprentice levy surfaced again over the weekend with the publication of a letter, co-signed by twelve organisations from across business and industry, calling on government to look again at its plans to introduce the new rules in April next year. The government has held firm to its timeframe, denying that Brexit would cause a delay. However, the publication of further details, due in June, is not now expected before September.

The letter lays out in detail the organisations’ concerns over the timing, scope, implementation and impact of the Levy. Co-ordinated by the Charity Finance Group, the letter was signed by:

ADS
British Plastics Federation
British Printing Industries Federation
Campaign for Science and Engineering (CaSE)
Charity Finance Group
Chemical Industries Association
CIPD
EEF
Food and Drink Federation
Institute of Directors
Manufacturing Technologies Association
TechUK

 

Delaying the levy the ‘responsible path’

Caron Bradshaw, chief executive of Charity Finance Group who co-ordinated the letter said: “This is the crunch point for the apprenticeship levy. If the government decides to push ahead with the existing timetable we will see vital charitable funds being redirected away from the causes which they were intended to support.

The sector has only recently come out of recession and will not be immune to the economic challenges that Brexit threatens. History has shown that in times of economic uncertainty demand on charities’ front line services increases, we cannot therefore risk losing vital funds through a policy that, in its current form, will not support our members to achieve their charitable objectives.

“The government would be taking the responsible path in delaying the levy and taking the time to engage with charities and other employers, who have already proposed solutions to some of the challenges presented by the levy, on how it could work to genuinely improve skills across the British economy and help support young people into meaningful employment.”

‘The levy is a blunt instrument’

Peter Cheese, CEO of CIPD, said: “In its current form, the levy will undermine overall apprenticeship quality and wider investment in the skills. The government needs to delay its introduction and engage with employers across all sectors to ensure that it will genuinely improve skills and productivity across the economy.

“While we share the ambition of the government to increase the number of apprenticeships, the levy is a blunt instrument providing employers with a ‘one size fits all approach’ to training, forcing many larger employers to make a net contribution to a scheme that our research shows will suit only relatively few. Given the economic uncertainty caused by the vote to leave the EU, I believe it is imperative that the Government delay its introduction and look again at how it will work.”

 

‘Levy would see a decline in quality and quantity of apprenticeships’

Terry Scuoler, chief executive at EEF said: “Our industry is passionate about high quality apprenticeships and we want to see more of them. However, if the government pushes ahead with its current timetable for the apprenticeship levy we could see a decline in both the quality and quantity of apprenticeships. This will do nothing for the apprenticeship brand or the government’s ambitious three million target.

“Industry and others have come up with solutions to some of the major sticking points of the apprenticeship levy, but these require more time. A delay to implementation is vital if we are to successfully get this policy back on track, avoid hitting business with additional costs at a highly uncertain time and ensure that the apprenticeship levy fits in fully with a wider industrial strategy.”

Antony Walker, deputy CEO, techUK added: “In the wake of the EU Referendum it matters more than ever that we get the Apprenticeship Levy right. In both design and delivery the Levy has to work for and not against the needs of the most dynamic and innovative businesses in the UK. The government must work more closely with industry to ensure that the Levy it is fit for purpose.”

Steve Elliott, chief executive Chemical Industries Association, added: “We all want to see more apprentices and we all believe a levy could be part of the solution. The delay we are seeking will allow for what at the moment is a confused mechanism that has the potential for creating fewer apprenticeships, to become part of an effective solution.”

 

‘Plumbers boss backs delay’

The publication of the letter coincided with one of the Levy’s most enthusiastic supporters also calling for a delay. Pimilco Plumbers founder Charlie Mullins told the press over the weekend that despite his support for the levy, the timing, coming so soon on the heels of Brexit, amid continuing economic uncertainty, may have to be rethought.

‘We are still taking on people, but I’m also hearing of other companies laying off staff,’ Mullins said. ‘For me the downturn in apprenticeships is about the threat of leaving the European Union.

‘The uncertainty right up until the referendum stopped people taking on apprentices because they’re a long-term commitment – three years – and the uncertainty has slowed it down. Apprenticeships are definitely an investment.”

 

‘London businesses concerned over flexibility’

And it’s not just the timing of the Levy’s introduction. A second effort is being launched to urge more flexibility in how the levy is applied and imposed, following on from research which showed that more than a third of London business decision makers would like to be able to use funds from the government’s new apprenticeship levy on alternative streams of training.

“LCCI supports efforts to promote and create apprenticeships but has found that smaller companies have found it bureaucratic whereas larger firms have more resources to offer apprenticeships in larger volumes,” said chief executive of London Chamber of Commerce and Industry.

“What has become clear here is that businesses would like to see more flexibility in how they can apply funds as a result of the levy. Sometimes it is more effective for firms to give existing staff extra training, or indeed transfer the levy to a smaller firm within their supply chain which is more likely to benefit.

“While we support the principle the Government needs to be very careful not to fall into the trap of one size fits all.”