The Confederation of British Industry (CBI) has urged the government to ‘pick up the pace’ in regard to its reform of the Apprenticeship Levy initiative.
Introduced in April 2017, the Apprenticeship Levy has changed the way in which apprenticeships are funded: larger employers are required to invest a percentage of their annual pay bill in apprenticeships. The Levy is 0.5% of the pay bill, but there is an annual allowance of £15,000. It is reported and paid using the Pay as You Earn (PAYE) process.
The CBI’s statement comes following the recent publication of the latest Apprenticeship Levy statistics, which have revealed that, between August 2017 and April 2018, there were 290,500 apprenticeship starts – a fall of 34% when compared to 2016/17’s figure of 440,300.
The government is committed to achieving its target of creating three million apprenticeships in England by 2020.
Commenting on the statistics, John Cope, Head of Education and Skills at the CBI, said: ‘This stark drop in apprenticeship starts serves as a reminder that the Apprenticeship Levy is not working as intended. If we don’t significantly reform the Levy quickly, companies will find it harder to invest in the quality apprenticeships and skills training they value so highly.’
Meanwhile, the Institute of Directors (IoD) also warned that, if take-up of the Levy continues to be low, it ‘does not look possible for the government to meet its target’. The IoD added that ‘it’s now time for the government to rethink its approach and work with businesses’ in order to successfully reform the Levy.