Many businesses are still struggling to claw back benefits from the government’s apprenticeship levy, as new research released today shows London firms remain in the dark about how the scheme works.
Research from the London Chamber of Commerce and Industry (LCCI) has found that more than a third of businesses are not aware of the government's new apprenticeship funding scheme.
In April last year the government introduced a new apprenticeship levy for firms with an annual pay bill of over £3m.
The levy was intended as a means of funding apprenticeship training. It is expected to raise around £2.8bn by 2019-20.
However, the effectiveness of the system has been called into question, with just nine per cent of London firms saying that it has prompted them to increase the number of apprenticeships they offer.
Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, said: "Worryingly what is most clear is that there is a lack of understanding and indeed perceived clarity over the levy and how it can benefit business.
"At a time when many companies and industries in the capital are facing skills shortages, apprenticeships can be a vital tool, but such schemes will only work with increased business understanding and involvement."
In September, the British Chambers of Commerce (BCC) warned that firms did not know how to make the most of the apprenticeship levy. The group conducted a survey of businesses and found nearly a quarter of firms (23 per cent) paying the tax do not understand it. And, more than half (56 per cent) do not expect to recover anything from their payments to the government.
It then emerged that apprenticeship numbers fell sharply following the introduction of the tax. New enrolments dropped 59 per cent in the last three months of the 2017 academic year to 48,000, according to the Department for Education. This compared with 117,000 in the same period last year.
Business groups were not surprised to see numbers fall so dramatically, and called on the government to re-work the levy.