Businesses want government to sort out the apprenticeship levy, finds new research

Hayley Kirton
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Not even half of businesses plan to increase their apprenticeship places under the incoming system (Source: Getty)

A rethink of the incoming apprenticeship levy ranks high on businesses' wishlist for Theresa May's new government, research out today has found.

In the study of nearly 500 organisations by the Confederation of British Industry (CBI) and Pearson, just under half (45 per cent) said the levy's current guise would force them to put up prices or accept reduced margins.

Over a third (39 per cent) believed the levy would lead them to cut non-apprenticeship training.

Just 38 per cent planned to increase the number of apprenticeships they offer under the new system, while another third (34 per cent) said their approach to training and apprenticeships would continue as usual.

Read More: Everything you need to know about the apprenticeship levy

"As it stands the levy system will work in Whitehall but it won’t work in Walsall, or any other part of the UK where business is training and developing people," said Josh Hardie, CBI deputy director-general. "While the ambition is positive, the current design does not recognise the breadth of great training currently being delivered and runs the risk of unintended consequences, including fewer apprenticeship opportunities, downward pressure on wages or cut-backs on non-apprenticeship training."

Meanwhile, Neil Carberry, director for employment and skills policy at the CBI, told City A.M.: "Clearly there's a need for a radical redesign, which is what we're looking for, and probably taking the time to get it right."

Carberry added the April 2017 introduction date for the levy now "looked very, very challenging", especially because much of the information companies needed to tailor their programmes in time had still not been stacked up by government.

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A government spokesperson said: "We are introducing the apprenticeship levy so that businesses have the talent they need to grow and thrive. We will continue to work closely with businesses of all sizes to design the levy around their needs."

The CBI survey also painted a bleak picture for skills shortages, as over two-thirds (69 per cent) of those questioned confessed they were concerned about filling their high-skill roles in the future.

Meanwhile, 77 per cent of firms believed they would have more high-skilled jobs in the future. Carberry pointed out even some traditionally low-skilled sectors were witnessing their jobs shift to the high-skilled end of the spectrum.

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