Use apprenticeship levy to support small businesses, Industry Skills Board urges

Tes Reporter

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Large employers should be able to use their apprenticeship levy contributions to fund apprentices for smaller firms, according to a leading coalition of companies, training providers and unions.

Andy Smyth, chair of the City & Guilds’ Industry Skills Board (ISB), told TES the levy represented a “huge step change” that would involve employers taking a much more direct role in funding workplace training. However, while there have been levy systems before, “they have not always delivered the desired results”, he added.

The levy would give larger employers a “huge incentive” to take on apprentices, but this was not the case for smaller employers – who already offered a large number of apprenticeships, Mr Smyth said.

In a report to be published next week, the ISB, which brings together employers, the TUC and training providers, would therefore recommend that ways should be found to allow large firms to “use their levy funds with their supply chain in collaborative training schemes that help their whole sector”.

Ways to ensure this could include large firms using some of the levy on development work or projects with suppliers; taking on the employer cash contribution towards the cost of an apprenticeship; or funding training at the smaller firms they work with.

Plans for the levy were announced earlier this year. Likely to apply to large UK employers, it will be used to finance the government’s target of 3 million apprenticeship starts by 2020. A consultation on the scheme closes today.

Stewart Segal, chief executive of the Association of Employment and Learning Providers, which sits on the ISB, said the consultation offered the opportunity to review the impact of the proposal, not just on large employers that will pay the levy but also on small and medium-sized enterprises. “Larger employers can play a very positive role by supporting and encouraging businesses in their supply chains to get engaged in apprenticeships," he said.

Warren Page, apprenticeship manager at mechanical engineering firm Xtrac, said his company, which has over 200 employees, would in all likelihood have to pay the levy. Taking on an apprentice was very expensive for small companies and anything that would support them was to be welcomed, he said, adding that he would support the levy being used to benefit supplier companies. "If it was for our suppliers, that would ensure they had highly trained staff, and that would help us."

A spokesman for the Department for Business, Innovation and Skills said  thatsmall companies would not have to pay the levy and would “continue to have access to government funding to support apprenticeships”. He added that further details would be set out in the spending review in November.

The ISB report Making Apprenticeships Work will be available from 5 October at

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