Business survey reveals ‘low awareness and understanding’ of apprenticeship levy
29 September 2017
One in four firms paying the apprenticeship levy does not understand how the new system works, a study has found.
A survey of 1,400 businesses by the British Chambers of Commerce (BCC) revealed that just over half did not expect to recover their payment even though employers will receive an annual allowance to be offset against the bill.
Employers with a total wage bill in excess of £3 million pay the levy, which was introduced in April, at a rate of 0.5% of their total annual wage bill, with the aim of increasing the number of apprenticeships.
Jane Gratton, head of business environment and skills at the BCC, said: "Low awareness and understanding of the levy has not been helped by uncertainty faced by training providers tasked with delivering apprentices to business.
"For many businesses who pay the apprenticeship levy, it can feel like an additional employment tax, much of which they are unable to recover, and one that is deflecting training budgets away from other important training needs.
“Firms need greater flexibility on how they can use their levy monies and a system that is fully operational as quickly as possible, is simple and efficient, and that enables them to access good quality training.
“Our survey shows that many firms are still unaware of the apprenticeship levy and how it will impact on their business.
“With many companies across the country facing critical skills shortages, more information and support is required to ensure businesses continue to invest in training.”
David Williams, of Middlesex University London, which helped with the research, added: “It is clear that better information is needed to make sure the huge benefits of apprenticeship programmes are recognised by business.”
A Department for Education spokesman said: “Our apprenticeship reforms are putting control back into the hands of employers.
“We expect there to be a period of adjustment while employers plan ahead to ensure they can maximise the opportunities that apprenticeships can bring to their organisation, supported by a high-quality training provider market.”