EEF calls for apprenticeship levy delay
4 May 2016
Manufacturers’ organisation EEF has called on the government to delay the rollout of its Apprenticeship Levy amid concern from its members.
In new research published today, EEF found that just 1% of manufacturers support the levy in its current format.
Tim Thomas, director of employment and skills policy at EEF, said the "headlong rush" to bring the levy to market leaves little time to iron-out some significant concerns and get responses to industry’s unanswered questions.
The fact that just 1% of firms want to see the levy go into place in its current guise is pretty telling
EEF director of employment and skills policy Tim Thomas
“As a result, firms can see serious flaws that could sink this policy at launch. This is in nobody’s interests, which is why we’re recommending a delay to buy us all enough time to avoid the looming car crash," Thomas said.
According to EEF, more than 70% of manufacturers said the levy should be delayed until at least September 2017 to make it 'fit for purpose'.
The research reveals 92% of businesses want the levy to be simple to administer, easy to understand (89%), and easy for firms to access the funding (79%).
However, roughly half of manufacturers have labelled the scheme confusing and overly complex.
But despite the concerns, manufacturers are committed to providing quality apprenticeships, Thomas said.
“They are supportive of the principles behind the Apprenticeship Levy, but are clearly dismayed at the way it is being put into practice. The fact that just 1% of firms want to see the levy go into place in its current guise is pretty telling,” he said.
The Apprenticeship Levy was first introduced in the Chancellor George Osborne’s 2015 Summer Budget. It is designed to encourage larger firms to take on more apprentices and help bridge the skills gap.
In his Spending Review/Autumn Statement, the Chancellor announced the levy will stand at 0.5% of a company’s payroll and will affect businesses with a wage bill of £3 million and over.
As part of the scheme, employers will receive a £15,000 allowance against the levy and those with a wage bill of less than £2 million will be exempt from the levy and will pay zero tax on it.
Speaking ahead of the levy's launch last year, Thomas said there are several future challenges which must be overcome before manufacturers can support the new scheme.
"Employers must be able to control the funding, with the lowest possible level of red-tape."
