The apprenticeship levy risks damaging the current provision of training for all staff, according to the British Chambers of Commerce (BCC).
In its evidence to the Commons education select committee, the BCC said uncertainty around how the apprenticeship levy will work in practice, and the potential for the cost of training apprentices to increase, had prompted employers to scale back successful training schemes across the whole of their organisations.
Laura Overton, chief executive of L&D benchmarking body Towards Maturity, said that while the organisation hadn’t seen any evidence of employers actively scrapping training ahead of the apprenticeship levy, the whole debate had highlighted the fact that skills provision and the quality of training programmes in the UK required a rethink.
“The evidence has been there for a number of years, of what really works in terms of training and upskilling the UK labour market. Yet government and employer provision has been woefully inadequate,” said Overton.
“It’s not an issue of who is providing the training and L&D, but how. Training needs to be innovative, more aligned to needs and recurrent skills gaps. A levy just isn’t going to fix that.”
The group warned that any gains made in recent years in plugging the UK’s skills shortage could be wasted unless the government clarified the terms of the new scheme.
Adam Marshall, acting director general of the BCC, said: “We have heard of incidences where companies have had to cut back their existing training offers, which were successful, in anticipation of having to pay an apprenticeship levy, simply because their training was not an official apprenticeship.”
The submission read: “The levy model is effectively a payroll tax on business. It is a ‘one size fits all’ model, which, as currently designed, will struggle to deal with the various requirements of business when it comes to training their workforce.
“It is important that the delivery of the levy does not undermine other types of ￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼vocational training, which could be better suited to some businesses.”
The BCC also claimed that the current levy model would encourage employers to “shoehorn” other forms of training under the apprenticeship banner to recover the overall costs.
“It is important not to fall into the fallacy of thinking that apprenticeships represent all the training that matters to businesses,” the submission read.
According to BCC figures, total employer expenditure on training increased by 6 per cent between 2013 and 2015, from £43.0bn to £45.4bn, with apprenticeships just a small proportion of this. Today, the total spend on apprenticeships in the UK is around £1.8bn, and is only expected to rise to around £3bn with the apprenticeship levy.
Last week, the CBI reiterated the “unintended consequences” of the apprenticeship levy, which is due to be implemented in 2017 at the cost of 0.5 per cent of an employer’s pay bill.
Sarah Glendinning, CBI regional director, said the levy risked “making apprentices more expensive as well as penalising those already providing quality schemes.”
She added that “some businesses have already taken the difficult decision to scale back the number of places on offer” to all staff as a result of the increased costs.