The first two years of the apprenticeship levy should be treated as a “transition period” for businesses, the CBI has said.

The business lobby organisation claims that the timescale and design of the levy, which is due to be introduced in April, “poses big risks” for employers, and that the government should adopt a more flexible skills levy “over the longer term”.

The proposals are set out in the organisation’s submission to Chancellor Philip Hammond ahead of the March Budget. It states that businesses are in “a challenging and uncertain economic environment”, and further cost pressure “risks hampering firms’ ability to deliver jobs and growth”. 

The submission also calls for the government to create an employer-led system through the Institute for Apprenticeships, and to ringfence employers’ levy contributions to fund quality training .

‘Raising young people’s aspirations’

The CBI’s educational recommendations include installing a dedicated careers leader in every school, and for the government to be “vigilant” against further raising firms’ operational costs in light of the increase to the national living wage from £7.20 to £7.50.

Neil Carberry, director for people and skills policy at the CBI, said: “Funding for effective delivery of high-quality technical education is essential for our future competitiveness. Alongside this, careers leaders in every school and targeted action in key places through the opportunity areas scheme will build a platform for deeper co-operation between education and companies. 

“Raising young people’s aspirations has to be one of our top priorities, opening their eyes to a world of possibilities and ultimately underpinning the UK’s future economic fortunes.”

Rain Newton-Smith, chief economist at the CBI, said: “In a more challenging economic environment, the government must be careful not to put further pressure on firms.”

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