0.5% apprenticeship levy for large employers
A NEW apprenticeship levy will come into effect in April 2017 to fund the Government’s target of creating three million apprentices by 2020.
Chancellor George Osborne announced in the Autumn Statement that the levy, expected to raise £3bn a year, will stand at of 0.5% of an employer’s pay bill.
A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3m.
The Chancellor said this meant that less than 2% of UK employers will pay, “with those paying it able to get out more than they put in”.
The Chancellor said that in the last parliament the number of apprentices more than doubled to two million and he called the Government’s apprenticeship programme “the flagship of our commitment to skills”.
“To make sure they are high quality apprenticeships, we’ll increase the funding per place,” he said, adding that the business secretary will create a new business-led body to set standards.
“It’s a huge reform to raise the skills of the nation and address one of the enduring weaknesses of the British economy,” said Osborne.
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Lord Kumar Bhattacharyya, chairman of manufacturing group WMG, part of Warwick University, welcomed support for apprenticeships.
He said: “I am very pleased. These are matters I have campaigned on for a very long time.”
He also highlighted the Chancellor’s commitment to protect the resource budget for science in real terms, resulting in a rise to £4.7bn, and a promise to implement the Nurse Committee review of the nation’s research councils which among other things urged greater collaboration between them.
Lord Bhattacharyya said the moves were “extremely welcome”.
He said: “This will help keep us in the forefront of science and research developments across the world.”
Carolyn Fairbairn, CBI director-general, said: “The Apprenticeship Levy, set at 0.5%, is a significant extra payroll tax on business and by widening the net it will now catch more smaller firms.
“We welcome the creation of a levy board to give business a voice on how the money is spent and will work with the Government to ensure a focus on quality.”
Chris Greenough, director of West Midlands manufacturing SME Salop Design & Engineering, said: “If this levy leads to more training opportunities for young people, then this – as a starting point – must be a good thing. But there needs to be proper and rigorous policing of not only the way the levy funds are spent, but also the value of training provided and the jobs created through the policy.
“I would look to see more funds, potentially from this levy, made available for businesses to work with schools, and this funding could give schools the time to make sure their students have the best options for their individual futures.”
