Apprenticeship levy should not subsidise small firms, business body warns

6th August 2015 at 10:07

Money raised from the proposed apprenticeship levy should not be used to subsidise apprenticeships for small businesses, the CBI has warned.

In a new briefing paper on the policy, the CBI says employers will judge the success of the levy, announced in the Budget earlier this month, on the quality of apprenticeships delivered and how well they meet business needs.

It says that the levy must be “fair, proportionate and subject to proper consultation”, and that getting the rate and reach right will be “critical”.

“Small employers should remain exempt from the levy, but levy funding should not be used to cross-subsidise apprenticeships for small business,” it says.

“The approach being piloted, where the government contributes to the majority of the training costs of apprenticeships, should continue for small firms.”

It also says the "general education" elements of apprenticeship training, such as the teaching of level 2 English and maths, should remain outside the scope of the levy.

“It is the responsibility of government – not business – to fund these,” it warns.

The three page document, sent to CBI members last week, says the levy system should promote quality, give employers real control of the whole system, be simple to administer and be flexible.

Since the Budget announcement there has been limited detail about the levy. It is known that it will apply to large employers – though the definition of large has not been given – that it will be UK-wide, and that it will fund post-16 apprenticeships in England.

It has been speculated it will start in 2017-18, when most of the new apprenticeship standards will be in place.

Last week the Association of Employment and Learning Providers (AELP) warned the cost of the levy could actually deter employers from taking on apprentices, and called for its introduction to be delayed for three to four years.



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