Almost 40 per cent of business leaders have no understanding of the apprenticeship levy, a survey by the British Chambers of Commerce (BCC) has found.

According to the survey, which was carried out in partnership with Middlesex University, 39 per cent of over 1,600 business leaders do not understand, or hadn’t heard of, the apprenticeship levy - just six months before it is due to be introduced.

Furthermore, half of businesses (51 per cent) do not understand how the levy will work above or below the £3 million pay bill threshold - while just one in ten businesses (11 per cent) believed the levy would increase their recruitment of apprentices. Only 26 per cent of businesses expect to recover all or more of their levy payment, suggesting that for the majority of businesses the apprenticeship levy is seen as a tax.

‘The government need to step up communication’

Marcus Mason, head of education and skills at the BCC, said: “Firms value apprenticeships as way of developing skills and increasing productivity. However, with just six months to go until the levy is introduced, our research shows the government needs to step up its communication to business.

“The government needs to ensure that businesses understand how they could benefit from the reforms, because if it just feels like yet another tax then then the policy will have failed. Devolved administrations also need to provide a guarantee that the money raised is ring-fenced and kept for training.”

Robert Halfon, minister for apprenticeships and skills, said: “We have been working closely with employers and providers of all sizes through roundtables, meetings, events and webinars to determine how the levy will work for them, and we will continue to do so. We are listening to what they have to say to ensure the levy delivers for all - including the apprentices themselves.

“Through the levy, £2.5 billion will be invested in apprenticeships by 2019-20 - twice what was spent in 2010-11. And small businesses will not have to pay training costs for 16- to 18-year-old apprentices. This investment will create a ladder of opportunity for millions of people and give businesses the skills they need now and for the future.”

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