News | Published April 28 2019

Majority of employers back reform to apprenticeship levy, FSB survey says

A survey conducted by the Federation of Small Businesses revealed this week that over a quarter of UK employers favour reform to the government’s apprenticeship levy.

The government levy has already found itself in the firing line of employers nationwide since its introduction in April 2017.

It requires employers to pay 0.5 per cent of payroll costs into a fund designated for training, should their annual wage bill exceed £3 million.

Critics say the system is not only inflexible, but has culminated in struggles to spend apprenticeship funds amid lower-quality apprenticeship schemes and less training opportunities.

This comes in spite of the fact that the levy is aimed at promoting vocational training.

“Many small firms are turning away from apprenticeships, with some of the 2017 reforms being the cause,” said FSB chairman, Mike Cherry.

“Changes like the explicit requirement for a minimum of 20 per cent off-the-job training, are causing real headaches.”

Apprenticeship numbers had been on a downward trend until March 2019, when the Department for Education recorded a ten per cent rise for the period of August 2018 to January 2019 compared to the same period in 2017/18.

The revelations offer little respite, however, with the FSB survey indicating sentiment among employers remains less than positive.

The figures show that 27 per cent of employers who recruited apprentices before and after the levy came into force claimed that any impact on the business was negative.

The vast majority of apprenticeships undertaken at small businesses were revealed to be Level 2 and Level 3 qualifications, which make up 87 per cent of the total number of apprenticeship schemes at small firms.

Level 2 apprenticeship starts have suffered a 45 per cent decrease, with Level 3 uptake down by 13 per cent.

Over 40 per cent of employers fed back that they had encountered difficulties with the hiring process, as well as grappling with an increase in hiring and training costs.

Another 29 per cent, approximately, reported that its arduous requirements took up too much managerial time.

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Authored by

Scott Challinor
Business Editor
April 28 2019

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