almost 3 years ago by Meg Fenner Jamieson

Turning the Tide on Apprenticeship Levy?

Turning the tide of apprenticeship levy

It’s almost one year since the introduction of the Apprentice Levy, so CMD Recruitment has reviewed the latest government statistics on apprenticeships.

There are 25% fewer apprenticeships this year than last. When the new levy was first introduced, ‘apprenticeships started’ fell by up to 60%, so we are taking this significant slump as a slight improvement on last year’s disastrous decline.

We are hopeful that the negative impact of the new apprentice levy can be addressed and resolved as government and employers get to grips with the new system. About 20,000 UK businesses pay the levy, (charged at 0.5% of their staff bill) and this money is put into a pot to be spent on training apprentices.

Businesses have raised concerns not only about the system but if the government’s target is even achievable. Helen Dickinson, representing British retailers, said"Greater flexibility as to what levy funds may be spent on is urgently required if the retail industry is to play its full role. Without retailers' full involvement the Government's 3m apprentices target will not be achievable."

Last year, a survey of manufacturing employers found that three-quarters of bosses don’t believe they’ll get back as much as they put into the apprentice levy pot.

So far, business has been slow to engage with the funding system, as The Daily Telegraph reportsAs recently as October, of the 19,150 companies paying into the levy, only 11,900 had registered to claim funding back from it. This means that 38% of companies contributing to the levy have effectively written the money off.

At CMD we’ve been following these changes with interest, and we’re reviewing the latest updates to see how we can help our clients maximise the opportunity to train and develop apprentices. Done right, apprenticeships can be a real boon to business, but without more flexibility in the system, it’s difficult to make it happen.

Next week we’ll be posting more information about the impact of the apprenticeship levy and how to make it work for your business.