2nd March 2016
Although the levy will place a cost burden on large firms, it will be well worth the investment. These companies can use the opportunity to develop higher-level apprenticeships that can plug skills gaps within their business and make it more competitive. There’s also the important issue of supply chain development to consider. Large employers need to develop strong supply chains and funding apprenticeships within SMEs is a great way of achieving this.
That said, the levy won’t necessarily guarantee a rise in the uptake of apprenticeships and many smaller firms may postpone investment in this type of training until the levy is in place.
The aim of increasing the numbers of apprentices is supported by all in the manufacturing sectors and hopefully this levy scheme will prove to be both fair and successful; but there are many questions still to be answered and unintended consequences are inevitable. For some companies, the recouping of levy money via the voucher scheme will act as an incentive to engage more apprentices, while for others (who currently spend more than the levy amount) it may result in a reduction of their intake to match the levy scheme cost.
Also, SMEs are now considered to be crucial to future prosperity in the UK and yet the levy will not apply to them.
I am a firm believer in apprenticeships, having undertaken one myself, and I believe that they are vital in forging careers. It does make sense that large businesses should contribute to creating apprenticeships and it would certainly encourage me to take on further young people to offer them an opportunity to gain valuable work experience and training. There is still a long time until this policy comes into effect, but it is a good initiative, which will affect only a small percentage of firms, and one that will hopefully support the skills gap and benefit all businesses in the long-term.
The worry is that big businesses may consider laying off staff or not giving an annual pay rise in order to stay under the £3 million threshold to avoid having to pay the levy, despite the Government promising that employers who are committed to offering training will get more out of the levy than they pay in financially. I believe the emphasis should not be on gimmicky policies to force employers’ hands. It should be on encouraging businesses to focus on the advantages that come with investment in apprentices and continuing the push to ensure apprenticeships are no longer seen as ‘second-class’ options in comparison to university degrees.