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Gov hails 'biggest skills shake-up in a generation' as Apprenticeship Levy launches

The government has officially launched its Apprenticeship Levy today in a move it has hailed as the greatest shake-up of the UK skills landscape in a generation.

Announced by the former Chancellor George Osborne in his 2015 Spring Budget, the levy aims to coerce larger firms to invest more into ‘high-quality’ apprenticeship schemes, while also helping smaller businesses by paying for some or all of the costs associated with apprentice training.

From today, all employers with an annual wage bill of over £3m will have to pay 0.5% of it towards funding apprenticeships, a figure which the government claims will double annual apprenticeship spending to £2.5bn by 2019 to 2020.

Employers in England can also set up online accounts to manage their apprenticeship funds on top of which the government will provide a further 10% top up to levy contributions each month.

For small firms, deemed as those with a wage bill of less than £3m per annum, the government will pay 90% of the costs associated with training and assessing their apprentices, while those with 50 staff or less will have 100% of the costs paid for any apprentices they take on between the ages of 15 and 18.

Skills Minister Richard Halfon, claimed that the new levy is a ‘massive part’ of the government’s efforts to resolve the country’s skills shortage, which will likely only worsen following Brexit.

He said: “More than 90% of apprentices go into work or further training, and the quality on-the-job training on offer will make sure we have the people with the skills, knowledge and technical excellence to drive our country forward.

“Building an apprenticeship and skills nation is essential in ensuring that we have the home-grown workforce we need in post-Brexit Britain to address the skills shortages facing industry and give everyone the chance to succeed.”

However, the new initiative has drawn criticism from those who view it as yet more red tape which could potentially draw resources and funds away from training and apprenticeship schemes already in place.

Similarly, the government’s ‘lead-in’ has come in for significant criticism from the likes of the CBI, with many employers remaining unaware of the levy or even how it will impact them.

According to research by the training organisation City & Guilds, one in three employers it surveyed on the eve of the scheme’s launch seemed oblivious to its impending introduction, while those who were aware of it were confused about exactly how it would work.

Kirstie Donnelly, Managing Director of City & Guilds, commented: “Our research demonstrated that employers were still confused, with just a third saying they felt fully informed about the levy and very few understanding the huge range of jobs that can be filled by apprentices.

“If employers are to embrace the opportunities the new apprenticeship system could bring it’s important government gets the message out about the benefits, such as creating a strong pipeline of talent.”

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