The Government is pushing ahead with its proposal to require
large employers, to "invest in apprenticeships". Many
thought the levy plans, which were not popular with many business
groups before Brexit, would be shelved following the referendum
result based on economic uncertainty. However, the Department for
Education's publication of the proposals for apprenticeship
funding means that it is likely that final proposals will be
confirmed in October and imposed in April 2017.
The levy is designed to fund three million places for
apprentices, by charging qualifying employers (those operating in
the UK with a pay bill over £3 million each year) 0.5 per
cent of their annual pay bill. Once employers have declared the
levy to HMRC they will be able to access some of funding through
their account on a new digital apprenticeship service. The latest
consultation documents put flesh on the bones of the proposed
funding regime. In the documents, the apprenticeship frameworks and
standards are divided into 15 funding bands ranging from
£1,500 to £27,000. The consultation documents cover a
few more practical areas which may affect large employers,
including cross-border funding and directing funds in a digital
training account to another employer. They also propose that
employers "co-invest" with the Government where they have
insufficient training funds in their digital accounts, or they are
not subject to the levy.
The previous Chancellor said that those paying the levy would
"get more out than they put in". However, an employer
caught by the levy, still cannot say that the apprenticeship model
does not meet the needs of its business, or opt out of the levy
altogether. Employers not looking to buy apprenticeship training
are instead likely to rebadge existing roles as apprenticeships to
mitigate their costs.
The CBI, CIPD and British Retail Consortium have been vocal
about their concerns about the levy and their feelings that
businesses are being ignored. They warn that narrowing training
covered and enabling employers to only reclaim off-the-job costs
could result in training being cut back and quantity being put
ahead of quality. They call on the Government to delay
implementation to give time for full consideration and ensure that
the levy is fit for purpose.
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