The UK’s leading employers’ organisation has criticised the government’s new apprenticeship levy consultation for failing to explore the cost involved or the minimum size of “larger employers” set to cough-up.
While the document accompanying the consultation launched this morning said that the levy will be paid by “larger employers” in all sectors, based on “the total number of employees”, it failed to give any indication of the size of workforce this would entail.
The document, published ahead of an announcement this morning by Prime Minister David Cameron on how public procurement contracts will help boost apprenticeship numbers, added that the government wants the levy “to be calculated on the basis of employee earnings and for employers to pay the levy through their PAYE return”.
But it failed to give any indication of the cost involved, instead stating that the “rate and scope” of the levy for “all sectors” will be announced as part of the autumn spending review.
Neil Carberry, director for employment and skills at the Confederation of British Industry, told FE Week: “There isn’t anything here on rate, remit or the definition of a larger employer, which was something we think is important and does need to be discussed with employers and the sector.
“Our view is these are critical issues and the CBI will respond to them, even though the consultation does not ask for it.”
He added: “The UK is facing needs a world-class apprenticeship system which delivers the higher level skills that business and the workforce need.
“We must not sacrifice quality for quantity. While we did not support the introduction of a levy, the key thing now is that the apprenticeships it delivers meet business demand and give young people routes to great careers and higher pay.
“The best way to drive up quality is to give employers real control and ensure that levy cash is committed to only funding apprenticeships in levy-paying businesses.
“The consultation is welcome, but there is much to do to build a system that works, including deciding the rate of the levy and building a levy structure that avoids the mistakes of the past.”
A Department for Business, Innovation and Skills spokesperson said: “The threshold for what defines a larger employer will be announced in the spending review.
“This consultation will help determine what that threshold is.”, although there was no mention of a threshold or related question in the consultation.
Views are only requested in the consultation on how “the size of firm[s] should be calculated” as no system has been agreed.
The document also said that “larger employers” would, under the proposals, claim back levy payments to fund training through a digital voucher system.
Smaller firms would be expected to use the same voucher system too, it stated, although the BIS spokesperson told FE Week last night that they would not have access to the levy fund.
He was unable to comment ahead of publication on how apprenticeships run by small firms would funded under the new system.
The document added: “We envisage that employers will receive ‘top-ups’ to their levy account over and above their own contribution,” it added.
There would though, under the plans, be “a limit” to how much employer’s voucher accounts “will be topped up each year”.
The document also raised questions over whether providers funded through the levy would need to be approved and their provision inspected.
It added that employers would be able to use the vouchers to cover all costs of an apprentice’s training, including English and maths, assessment and certification.
The consultation forms part of what the Prime Minister calls a “package of radical plans” to help the government hit its target of 3m apprenticeship starts by 2020.
The BIS spokesperson said that this would include new measures requiring all bids for government contracts worth more than £10m to “demonstrate a clear commitment to apprenticeships” from September 1.
Shadow Skills Minister Liam Byrne said that the Conservatives had made an “apparent U-turn” on the issue — after Tory MPs opposed previous Labour proposals for enforced targets on apprenticeship recruitment ahead of the general election.
Transport Secretary Patrick McLoughlin will also today announce plans to create 30,000 apprenticeships in the road and rail industry over the next five years.
Meanwhile, the government confirmed this morning that a further 59 new Trailblazer apprenticeship standards have been published, although none are “ready to deliver”.
Visit https://bisgovuk.citizenspace.com/ve/apprenticeshipslevy to download a copy of the consultation that closes on October 2.