BUDGET: Sceptical response to apprenticeship levy

THE Chancellor’s plan to introduce a training levy on large firms to help fund more apprentices has met with scepticism in certain quarters.

Mr Osborne said that in order better productivity people needed to be given the skills to do the job.

The government has committed to creating three million new apprentices but funding the places has proved an obstacle.

Mr Osborne said that in order to fund the apprenticeships and make sure they were of the right quality, it had had to confront some harsh truths.

He said: “While many firms do a brilliant job training their workforces; there are too many large companies who leave the training to others and take a free ride on the system.

“So we are going to take a radical, and frankly long overdue approach. We are going to introduce an apprenticeship levy on all large firms. Firms that offer apprenticeships can get more back than they put in.”

He said this would ensure that Britain’s great businesses were up to training the next generation of their workers.

The money raised from the new levy will be directly controlled by employers and the Chancellor said the government would work with businesses on how to do this.
“It’s exactly the sort of bold step we need to take if Britain is going to raise its game,” he said.

Responding, Paul Raynes Director of Policy at EEF, the manufacturers’ organisation, said: “Manufacturers will be sceptical about a training levy, especially as their financial investment in high quality apprenticeships already far outweighs the public subsidy available to them. The Chancellor has given welcome reassurance that the levy would only apply to large firms and will be directly controlled by employers.

“We look forward to discussing with the government the best way to ensure every penny raised would be spent on valuable training that employers actually need and want. There will be no tolerance among businesses for re-creating the failed and costly skills bureaucracy of the past.”

Lord Kumar Bhattacharyya, chairman of manufacturing group WMG, part of Warwick University, suggested the new levy was akin to the 1970s system of training boards but was generally good news.

Lord Bhattacharyya, a campaigner for high quality apprenticeships, said the announcement was “good news”.

Overall, he said the Budget was “highly pro-business” and he praised in particular the raising of the Annual Investment Allowance for SMEs to £200,000.