Pressing ahead with the apprenticeship levy is irresponsible, says CIPD

The CIPD has criticised the government’s announcement on apprenticeship reforms saying it is “irresponsible to press ahead in economic uncertainty.”

The government today (12 August 2016) has published proposals for a new funding model for apprenticeships and further details on the apprenticeship levy.

The funding will support people of all ages to gain high-quality skills and experience and help employers to offer more training opportunities and build a skilled workforce.

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Under the plans for the levy, the government has proposed that employers that are too small to pay the levy around 98 per cent of employers in England will have 90 per cent of the costs of training paid for by the government, reassuring millions of small businesses.

Ben Willmott, Head of Public Policy at the CIPD, the professional body for HR and people development said: “It is disappointing the government has not taken the opportunity afforded by a new ministerial team – and change to the department responsible for skills policy in the UK – to look again at the apprenticeship levy.

“The very valid concerns regarding the levy in its current form are wide scale across organisations from the private, public and voluntary sectors and it is irresponsible for the Government, particularly in a time of economic uncertainty in the aftermath of the referendum, to simply press ahead with a policy that is not fit for purpose.

“Our research suggests the levy, in its present form, will undermine efforts to improve the quality of apprenticeships. This is a time where we need to be raising the status of apprenticeships, not pursuing a policy which will have the effect of devaluing the ‘apprenticeship brand.’”
In addition, there is the damaging unintended consequences of forcing employers to reduce investment in other areas of equally valuable workforce training and development, and to essentially ‘re-badge’ existing training as apprenticeships in many instances.
This ‘one-size-fits-all’ approach will damage attempts to improve the UK’s workplace productivity and will not address the downward trend in employer investment in training in recent years.”
There is still time for Government to make a success of the Levy by re-shaping the policy in the following ways:
• Adapting the Levy into a more flexible training levy which would still enable levy funding to be used for apprenticeships, but would also mean that employers could use this funding to invest in other types of workplace training and skills development. This would enable the Government to meet its objective of increasing the number of apprenticeships in the UK, while also addressing concerns from employers about the levy.
• Weight levy funding to favour Level 3 and above Apprenticeships, in order to encourage employers to increase their investment in advanced and higher level apprenticeships relative to those at intermediate level.
• Allocate a proportion of apprenticeship levy funding to Local Enterprise Partnerships/Business Growth Hubs to enable them to encourage and support smaller non-levy paying employers to use levy funding to invest in apprenticeships.
• Encourage Local Enterprise Partnerships and Business Growth Hubs to support and develop the creation of more advanced and higher level apprenticeships”

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