Spending Review: Apprenticeship Levy set

A new levy on businesses will help raise £3bn a year for three million new apprenticeships, George Osborne has said.

Large employers in the UK will have to pay an “apprenticeship levy” amounting to 0.5 per cent of their total wage bill to encourage large companies to offer quality training to young people.​ However, smaller companies who make less then £3m will not pay the levy.

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“Every employer will receive a £15,000 allowance to offset against the levy – which means over 98 per cent of all employers – and all businesses with paybills of less than £3 million – will pay no levy at all. Britain’s apprenticeship levy will raise £3bn a year. It will fund 3 million apprenticeships.

“With those paying it able to get out more than they put in. It’s a huge reform to raise the skills of the nation and address one of the enduring weaknesses of the British economy.”

“We will be spending twice as much on apprenticeships by 2020 compared to when we came to office,” said the Chancellor. 

However, the proposed reforms has been criticised by industry leaders. The Federation of Master Builders has warned that without financial support for SME builders, the Levy could cause construction apprenticeships to “nosedive.”

“This could be devastating for training within the construction sector. The construction sector is different as we already collect a training levy through the Construction Industry Training Board (CITB). Although the existing system is not perfect, it helps ensure small firms receive much-needed support over and above financial payment for the training itself.What’s more, our existing levy is used to support so much more than just apprenticeship training. To remove this element could have an adverse effect on standards within our industry.”



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