Businesses call for clarity on apprenticeship levy

Businesses are calling for more clarity on the logistics and affordability of apprenticeship levy.

From April 2017 the apprenticeship levy will see employers with wage bills over £3 million pay a 0.5% levy to fund apprenticeships.

However businesses have questioned the implementation of the levy and how it contributes to the government’s stated goal of creating 3 million apprenticeships by 2020. 

Research by City & Guilds found that 90% of surveyed employers thought the levy target was subjective, while 84% want the levy to focus more on sectors facing skill shortages.

The Institute of Directors (IoD) also found that 9% of businesses believe that the levy will encourage more work opportunities, while more than 33% said the levy will force additional costs leading to lower wages, raising prices or finding alternative savings.

Seamus Nevin, head of employment and skills policy at IoD, said 

"The biggest concern is making sure that the quality of apprenticeships meets what we need – this can't just be a box-ticking exercise. 

“First of all, the 3 million target is around starters, not finishers, and we know that 40% of apprenticeships that were started under the government's last term of office weren't completed.”

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