Business leaders express concerns over apprenticeship levy

Business leaders have expressed their concerns about the risks of the current Apprenticeship Levy for apprentices, businesses and the Northern Irish economy and urged close collaboration with business.

Business leaders have expressed their concerns about the risks of the current Apprenticeship Levy for apprentices, businesses and the Northern Irish economy and urged close collaboration with business.

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Jackie Henry, Deloitte Senior Partner and host for the event,  further explains why businesses in Northern Ireland could be left at a competitive disadvantage to their English counterparts: 
“Northern Ireland businesses are rightly concerned about the extra burden the Apprenticeship Levy represents.

“It is vitally important that the NI Executive amends existing skills policy to ensure that employers affected by the levy, as in England, have the opportunity to access levy money to address their own skills needs via tailored business-led apprenticeship or upskilling programmes. 

“Without this guarantee, employers who operate across the UK could prioritise English parts of their business at the expense of their NI operations.” 

Due to be introduced in April 2017, the Apprenticeship Levy will affect all firms across the whole of the UK with a payroll of over £3m, adding 0.5 per cent to payroll costs. The Levy will also apply to public sector employers including health trusts, universities and district councils.

Northern Ireland business leaders expressed their views to senior Department for the Economy officials at a CBI seminar hosted by Deloitte. They highlighted that businesses are committed to raising skill levels and apprentice numbers, but there are growing concerns among firms about the design and viability of the system.

In particular, about how levy paying firms will access their funds and the tight deadline meaning that businesses lack crucial information about the levy and a realistic lead-in time to prepare for it.

Emphasising the willingness of the business community to help and advise on how the system could best work, both in Stormont and Westminster, those around the table urged ministers and officials involved to draw on businesses vast experience and take the time to get it right. The system must incentivise firms to offer more apprentices – if the system design is wrong, as is the case in England, firms may have to cut back on training to afford the levy.   

CBI Northern Ireland Director, Nigel Smyth added: “One the biggest issues facing the Northern Ireland economy is the availability of the right skills – particularly STEM skills – with certain sectors already struggling to recruit.

“To remain competitive in a global marketplace, the NI Executive must ring-fence Northern Ireland’s proportion of levy monies and ensure businesses can access it to invest in workforce skills. Addressing skills shortages is the best way to improve our sluggish economic productivity rates.” 

“Timing is a critical issue. The Levy represents a fundamental shift in the skills across the UK. Yet businesses, especially in the devolved nations, are still in the dark about much of the detail and need a realistic lead-in time to prepare.

“Today, firms are having to treat the levy as a tax, because the headline cost is the only thing they’re certain of – with the operation of the levy across the four different UK skills systems a major outstanding question.

“That is why the CBI have called on the Government nationally, and in the devolved nations, to work with business and take the time to ensure the new system works properly, delivering for employers and their workforces and encouraging firms to do more, not less.” 




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