Large employers’ apprenticeship levy cash should go into one pot to benefit firms of all sizes, AELP tells government

Cash raised by the proposed new large employers’ apprenticeship levy should be combined with government funding in a central pot available to all employers of all sizes under a “simple” new system, the government has been told.

The Association of Employment and Learning Providers (AELP) made the proposal in its submission to the government consultation on the levy proposals, which closed on October 2.

It said: “Our overarching view is that we must keep this system simple, so we would be much clearer that any money raised by the levy goes into a single fund (for England) which would be combined with any investment funds allocated by the government (currently £1.5bn).

“The fund would then support all apprenticeships in England, for both large and small employers.”

Its response to the consultation added that all employers would then have “access [to] the funding support and the level of that support would be set out by the government for each standard (by bands) and for each age group of apprentices”.

An important benefit of this system would be that the “government’s [apprenticeship] contribution would not be dependent on each employer’s contribution or the price agreed for the training,” it added.

It welcomed guidance that the government had provided on its plans to distribute levy funding through a digital voucher system, but criticised the lack of information provided so far on the planned rate and scope of the charge.

It comes after the government was criticised by the CBI, in an FE Week article published on August 21 following the launch of the consultation, for failing to specify what the minimum size of “larger employers” set to pay the levy would be.

But the AELP response said that it “might consider a dual measure [for the minimum size] — either a minimum number of employees such as 250 and/ or a minimum turnover”.

It added: “There needs to be a simple method of calculating the levy and basing this figure on payroll costs appears to be the most straightforward approach.”

It also warned that “employers who are doing internal training, but which does not meet the standards required of an apprenticeship programme, may be tempted to re-badge their own provision to get their funding back”.

It said this could be avoided by, for example, an independent quality assurance process “managed by an organisation such as Ofsted, although this must be more closely managed by employers and stakeholders rather than government”.

Speaking as the consultation response was unveiled this morning, AELP chief executive Stewart Segal (pictured) said: “We accept that the levy will be a source of additional investment and will engage more larger employers.

“However we have to be cautious about the impact on the smaller employers in the apprenticeship programme and how the levy will focus the attention of employers on the programme’s financial cost rather than the quality of delivery.”

The consultation responses of a number of other sector bodies, including the Association of Colleges (AoC) and CBI were reported in edition 149 of FE Week.

The AoC warned the government against “using the levy as a reason to reduce its own £1.5bn annual spending on apprenticeships”.

The CBI’s response called for the levy to be controlled by a new independent board, using the Low Pay Commission as a “blueprint”.

A spokesperson for the Department for Business, Innovation and Skills (BIS) declined to say how many responses it had received, but said: “The government response [to all consultation submissions] will be published in due course.”

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