Businesses approach apprenticeship levy with cautious optimism
The government’s controversial apprenticeship levy comes into force tomorrow, but business leaders still have concerns about how effectively it will achieve its goals. BETHANY WHYMARK explores the issues.
With the implementation of the apprenticeship levy imminent, East Anglian employers are cautiously waiting to see how it will affect their working practises.
The controversial tax – to be paid by businesses with an annual paybill of more than £3m – is part of a government plan to create 3m more apprenticeships by 2020, but its efficacy has been questioned since it was announced in 2015 by then-chancellor George Osborne.
Criticisms include lack of awareness of the scheme among businesses, disincentives for employers from hiring younger apprentices and a potential lack of available jobs for new apprentices.
Norse HR director Patricia Fuller was one of the region’s most outspoken critics of the levy.
However, in the past year she has made a complete u-turn and now plans to help the commercial services group make the most of the funding by creating new apprenticeship positions across its sectors as well as upskilling its current workforce.
The company was already planning to expand its training programme, but it had been restructured to take advantage of levy funding.
Ms Fuller said: “Nothing is going to change the government’s mind, so we have taken a leap of faith and decided to approach it in an entirely different way.”
She added: “I remain hugely cynical of it, but I would like to think that in 12 months time our trust in what we are doing will be proven.”
Dayle Bayliss, who sits on the New Anglia LEP’s skills board, said employers in many industries were “still trying to get their heads around” what the levy could offer them.
“Because of bumps in the road around the scheme it has not been particularly clear,” she said.
“It is a chance to shape training provision to suit industry needs and make it industry led.
“A lot of SMEs who fall below the payment threshold are not seeing it as the opportunity that it is for them. It is for small businesses as well as large.”
John Dugmore, chief executive of Suffolk Chamber of Commerce, said: “Suffolk Chamber fully supports the expansion of apprenticeships and well-designed schemes which seek to bridge the worlds of education and work.
“We are, therefore, broadly supportive of the aims behind the levy, although this is yet in effect another input tax on businesses.”
Swarm Apprenticeships chief executive Chris Perry said the wider applications of levy funding had made it more of a “training levy”.
“It is making the larger businesses paying the levy focus on their training, doing what they have done before but repackaging it.
He added: “I think it is key that employers paying the levy have a choice of training providers. It is not ‘one size fits all’.
“The next six months will be critical to see if people actually spend the levy funding.”