Why implementation of the apprenticeship levy must be delayed

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Just last week I blogged on 5 key issues that the government needs to urgently address on the apprenticeship levy. Of course, the questions around the levy are not limited to just 5. Our continuously updated FAQs also includes a number of gaps.

Today, EEF is calling on the government to delay implementation of the apprenticeship levy.

Why? Put simply….So that government has more time to get the implementation of this fundamental reform right.

An overwhelming majority of manufacturers want to see the levy delayed

Overwhelmingly, manufacturers want to see the levy implementation delayed until it is considered fit for purpose from both the government and importantly businesses’ perspective: 

AppLevydelay

 

A push-back to September 2017 (at the earliest) would give employers some light relief

As well as giving the government time to get the levy right, a delay to September 2017 (at the absolute earliest) would also: 

  • Better align to manufacturers’ apprentice recruitment cycles (the clock wouldn’t then start ticking on vouchers until this date so employers would be more likely to spend what they have in their pot).

  • It gives employers a bit of relief for April 2017 which is the month new National Minimum Wage and National Living Wage rises will come into force as well as being the first data snapshot for gender pay reporting.

Manufacturers are not bashing government’s ambitions to increase the number of apprenticeships

Calling for a delay to the implementation of the levy is no suggestion that the government should not be prioritising apprenticeships or an attack on their 3 million starts target. 

  • 70% of manufacturers agree with the government’s drive to deliver more apprenticeships

The problem is they remain unconvinced that the levy is the tool to achieve this.

  • Only 18% of manufacturers think the apprenticeship levy will help to deliver the government’s ambitions to create more quality apprenticeships.

Simplicity and ease is key to getting the levy right

The levy is complicated. It’s an ongoing joke in the office about how many times I am talking through the levy to EEF members. I live and breathe the levy yet even I find the various parts of the puzzle impossible to put together.

Manufacturers (and myself) want to see it simplified and easy to understand: 

levysimplified

 

We’re far from getting the levy right

Manufacturers find the current proposals for the levy confusing, complicated and simply another cost burden on business: 

  • 53% agree that the apprenticeship levy is currently confusing

  • 54% think that in its current guise will just be another cost burden on business

  • 49% think it’s overly complication.

Not great news.

Remember “you can get back more than you put in?”

When the levy was first announced, the government promised that employers that train apprentices will be able to get back more than they put in. Then the goal posts moved when the government realised they needed to use the levy pot for all other bits of pieces – money for the devolved nations, money to fund younger apprentices, money to fund the administration of the levy (failing on EEF's 6 red lines on the apprenticeship levy!)

Levybackmorethantheyputin

Unsurprisingly then only 11% of manufacturers think that companies will be able to get back more than they put in. And with funding rates still to be published…who knows whether the government can deliver on this claim. Manufacturers are seriously sceptical.

Rethink and revise

Apprenticeships are vital for our sector and over 70% of our members currently offer them so it’s massively important we get this right. This means taking the time to build a swift, sturdy and simple system that businesses can rely on and trust.

The levy clearly isn’t ready for implementation so it’s time the government has a good rethink and revise.

 

 

 

Author

Head of Education & Skills Policy

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