Following on from the government’s pledge to create 3 million apprenticeships by 2020, Prime Minister David Cameron has announced the introduction of an apprenticeship levy.
It is being introduced with the aim of levelling the playing field, so that every large company contributes to developing the new generation of skilled apprentices as well as the training standards that they will require.
Although the government is yet to specify what constitutes a “large” employer, the Confederation of British Industry (CBI) has suggested this is likely to refer to businesses with 250 or more employees.
CBI also predict that the levy rate, which will be determined by HM Treasury, will be about 0.5% of payroll.
Countries already operating levy systems include the Netherlands, Denmark and South Korea.
APHC chief executive John Thompson said: “Although we would welcome any initiative that offers incentives to smaller businesses to engage in apprenticeship training, it is important that the levy costs do not discourage large employers from recruiting.
“Historically, the industry has withdrawn from a levy grant system because of the high costs involved in its policing and enforcement, which then left little value in the money collected. We will, of course, provide government with as much assistance and consultation as is required; however, the jury is still out with regard to the overall effectiveness of the initiative.”