Employer uncertainty over apprenticeship levy

1 in 4 employers are currently planning to use the apprenticeship levy to invest in training and development, according to research by the Chartered Institute of Personnel and Development (CIPD).

From April 2017, businesses with a bill of more than £3 million each year will be required to pay a 0.5% levy to fund apprenticeships through the PAYE process.

3 in 10 (28%) employers do not expect to use the levy to develop their training programmes while 39% are still unsure on where they stand on it.

A number of employers report that they do not currently understand the apprenticeship levy and the financial implications it will have on their businesses.

Other findings show:

  • 47% of employers are opposed to the levy, while 39% are in support of it
  • 26% are still unsure as to whether they will need to pay, while 31% have calculated how much it will cost them per year
  • 9% expect to use the levy to develop new apprenticeship programmes, while 18% say they will use the funding to improve existing programmes
  • 36% think the costs will lead to reductions in investment of workforce development
  • 29% will offset the extra costs to adapt training programmes for existing employees so that they can be accredited as apprentices.

Peter Cheese, chief executive of CIPD, said:

“We believe a much broader, more flexible training levy should be developed to ensure that the system is genuinely employer-owned and meets the skills requirements of organisations.

“This would enable employers to draw down levy funding, with appropriate criteria, for a wider range of training activities, as well as for apprenticeships.”

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