Government Attempts to Reassure Small Businesses over Apprenticeship Levy
Concern over the government’s proposed apprenticeship levy remains as the BCC warns of the potential negative outcomes
The government have tried to reassure small businesses that they will not be affected by the introduction of the apprenticeship levy, stating that only large companies will be forced to pay it.
However, the chancellor and government have failed to disclose what a larger company constitutes, with rumours suggesting that the Treasury is considering including businesses with 50 employees.
In an interview with The Financial Times, one Whitehall aide said; “We have been clear that it is larger firms that will be focused on,” but the government still haven’t finalised what the cut-off point is.
In the summer Budget, George Osbourne announced that large employers would have to pay a percentage (suggested as 0.5%) of their payroll to fund the apprenticeship programme. Under the programme, a company that pays £100,000 will receive at least £100,000 worth of vouchers to use to pay apprenticeship training providers.
The programme has proved to be unpopular with businesses as many feel quality will have to be sacrificed in order to reach Cameron’s target of three million apprentices by 2020.
Business support organisations, including the British Chambers of Commerce (BCC) have also vocalised concerns
The British Chamber of Commerce wrote:
“The levy model can lead to firms potentially being incentivised to recover costs by shoehorning other training into apprenticeships, and government — wanting to achieve its three million target — is encouraged to rebadge alternative forms of training as apprenticeships.”