CBI: 'Radical rethink' of levy is needed to prevent drop in apprenticeships

Current levy plans could actually lead to businesses cutting apprenticeship places, the lobbying organisation warns

Julia Belgutay

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The CBI will today call for a “radical rethink” of the apprenticeship levy because of "major concerns" about how it will be implemented.

Carolyn Fairbairn (pictured), director general of the business lobby organisation, will tell business leaders in London that significant concerns remain over the scheme, due to be introduced next year. And she will warn that the levy in its current form could actually lead to a drop in apprentice numbers.

Speaking to TES before her speech, she stressed that while the CBI was committed to supporting the government’s ambition to increase apprenticeship numbers, it was putting “a marker in the ground that there are still major concerns”.

“We think it is in danger of being counter-productive in terms of the goal [of creating 3 million apprenticeship starts during the current Parliament]," she said, criticising the narrow scope of the levy plans.

Ms Fairbairn said that one business had told the CBI that the levy payment would make up a quarter of its current training budget, and to make up for losing this, it would have to reduce the number of apprentices by "about a third”. A solution would be to allow businesses to use the levy for on-the-job training and other expenses, she suggested. 

'Not enough time'

The CBI is also concerned that the Institute for Apprenticeships is not up and running yet, and therefore currently not taking a lead role or setting standards, she added.

“The final concern is that there are so many unanswered questions,” she told TES. “We are very concerned there is not enough time. The worst thing would be a launch of a half-finished project. Businesses really want this to work, but at the moment it risks being a once in an administration shake-up, and we have had plenty of those.”

Last month, skills minister Nick Boles told TES that while the levy was on target to be introduced in 2017 with a new digital voucher system, the current funding system would continue for non-levy payers for "a couple of years more".

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Julia Belgutay

Julia Belgutay

Julia Belgutay is head of FE at Tes

Find me on Twitter @JBelgutay

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