Monday 8 August 2016 1:00 am

Apprenticeship levy needs to be more flexible according to new survey of London businesses

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MANY London businesses want more flexibility from the upcoming apprenticeship levy, a new survey has found, prompting a leading business group to call for the Government to pay heed to the needs of smaller firms.

According to a poll conducted by London Chamber of Commerce and Industry in partnership with ComRes, more than a third of London business decision makers would like to be able to use funds from the Government’s new apprenticeship levy on alternative streams of training.

Some 36 per cent of 508 businesses surveyed between mid-May and mid-June thought they should be able to spend funding from the levy on existing in-house training that is not an apprenticeship; 38 per cent wanted to be able to transfer credit to smaller companies within their supply chain to spend on apprenticeships or training and 35 per cent would like the option of using it to fund external training.

The levy, to be introduced in April 2017 requires employers with a wage bill of £3m or more to pay 0.5 per cent of that bill in order to help pay for the delivery of three million apprenticeships by 2020.

"What has become clear here is that businesses would like to see more flexibility in how they can apply funds as a result of the levy. Sometimes it is more effective for firms to give existing staff extra training, or indeed transfer the levy to a smaller firm within their supply chain which is more likely to benefit,” said Colin Stanbridge, chief executive of London Chamber of Commerce and Industry.

“LCCI supports efforts to promote and create apprenticeships but has found that smaller companies have found it bureaucratic whereas larger firms have more resources to offer apprenticeships in larger volumes. While we support the principle the Government needs to be very careful not to fall into the trap of one size fits all.”

Other criticisms of the scheme include the additional admin burden on HR departments and lack of detail on who will be included. Many employers are currently regarding it mostly as an additional payroll tax.

Garry Sharp, non-executive director at Step Ahead, a London based recruitment and training provider. Advises business to plan ahead for the levy. He said: “This is coming. Firms should make the most of it.”