Businesses are voicing concerns about the effect of the apprenticeship levy on training programmes and wages. According to a survey by Pearson and the CBI, 1 in 6 employers expect that the number of apprenticeship places will decrease when the levy (0.5% charged on annual payrolls of £3 million or over) is introduced. 22% expect that the charge will lead to downward pressure on wages.
The levy is due to be introduced in April 2017 but that timescale is looking increasingly tight. Key guidance about how employers can spend the money on apprenticeship training and what government funding will be available was due to come out in mid July, but has not yet been published. The Skills Minister, Nick Boles, resigned on 13 July and a replacement has not yet been appointed.
The apprenticeship levy scheme is complex and ambitious. Employers were eagerly awaiting the now overdue guidance to clarify how it would work in practice. If the details of the funding arrangements have not yet been finalised, or need to be revised in light of the Brexit vote and more pessimistic economic projections, that strongly suggests that the implementation of the scheme should be delayed to allow those details to be ironed out.
One in six businesses plan to cut the number of apprenticeships they offer as a response to the forthcoming apprenticeship levy, according to a new report – as a number of influential business lobby groups prepare to ask for it to be postponed.