Government gives Apprenticeship Levy green light

The government has confirmed today that it will press ahead with its Apprenticeship Levy next April. Some business groups, including the National Franchised Dealers Association, had called for a delay in its introduction to give them more time to adjust to the ramifications of Brexit.

But the government is taking a longer-term view, saying the levy is being introduced to spark more apprenticeships across all industries in an effort to address chronic skills shortages.

Skills minister Robert Halfon said, ‘Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers.’

The levy is the brainchild of former Chancellor George Osborne, who said it could raise £3bn a year to help the country create three million new apprenticeship roles by 2020.

The levy applies to all employers with a payroll of more than £3m. They will pay a 0.5% of their monthly payroll costs into a Levy fund which the government will contribute an additional 10% to.

Smaller employers with 50 or less staff – about 98 per cent of employers in the UK – will not have to pay the levy. However, under this scheme, they will only have to pay 10% of apprenticeship training costs from next April.

Mike Cherry, Federation of Small Businesses national chairman, said this announcement ‘sends a clear signal that ministers are listening to our members’ concerns.’

He added, ‘Getting apprenticeship reform right, including changes to existing funding arrangements, is key to apprenticeship growth among small businesses.’