Apprenticeship levy's rushed introduction could scare off employers, AELP warns

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The cost of the proposed new apprenticeship levy could actually deter employers from taking on apprentices, training providers have warned, as they called for its introduction to be delayed for three to four years.

In a new briefing paper on the policy, the Association of Employment and Learning Providers (AELP) says the levy, announced in the Budget earlier this month, requires a “cultural shift” that should not be rushed.

The current apprenticeship system, it says, depends on employers making a large financial contribution to the cost of the programme to cover recruitment, induction, on-the-job training, facilities, materials, salaries and other costs.

“There is a real danger that once employers have to pay a levy charge, they will question whether they are able to afford these other contributions which are often not tracked internally,” it continues.

“Creating a levy charge will mean that the finance directors of large employers will take a much closer interest in the cost of the programmes. This could be seen as a positive step forward but there will certainly be questions over employers contributing these essential non-cash contributions.”

It also warns that as large employers will be the main contributors to the apprenticeship fund, they may demand more say in how the money is spent.

Although the government has not revealed when the levy will be introduced, the AELP suspects it might start in 2017-18, when most of the new apprenticeship standards will be in place.

Its paper says: “AELP believes that this will be too early and we should ensure we take sufficient time to implement this effectively.

“We believe we should build the capacity of the system over the next three or four years before the levy is introduced.”

The four-page document also warns that it will be “more important than ever” to manage the quality of the programme once the levy is introduced.

It says employers whose training does not meet the apprenticeship programme standards may be tempted to re-badge their provision to get their funding back.

The AELP said it was “impossible” to know whether the levy would work.

“Although the levy may be a route to raise money in these difficult economic times, there are dangers that in the long term we will create a focus on the financial aspects of the programme and we will not be able to control the quality of a programme where many employers would not have chosen to be involved,” it says.

The Department for Business, Innovation and Skills is expected to launch a consultation on clamping down on low-quality, incorrectly-labelled apprenticeships later this week.

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