The apprenticeship levy comes into effect in April 2017 at a rate of 0.5% of an employer’s pay bill and will apply to firms with salary costs above £3 million, raising an estimated £3 billion a year by 2019/20 to fund three million new apprenticeships. The EEF said misgivings were so strong that only 1% of manufacturers supported the planned roll out of the new charge.
The Confederation of British Industry (CBI) has already called for a “radical rethink” of the policy, and ministers are now being pressed to announce a delay. The EEF said a survey of more than 150 firms showed that almost three out of four want the levy delayed until it is found to be “fit for purpose.” Most firms supported the Government’s drive to increase apprenticeships, but fewer than one in five believe the levy will help. Around half of those polled described the scheme as confusing, overly complicated and will become a burden on business. Only one in 10 believed Government claims that firms will get more out of the scheme than they will put in.
Tim Thomas, director of employment and skills policy at the EEF, said: “The headlong rush to bring this levy to market has left little time to iron out some significant wrinkles and get responses to industry’s unanswered questions. As a result, firms can see serious flaws that could sink this policy at launch. “This is in nobody’s interests, which is why we’re recommending a delay to buy us all enough time to avoid the looming car crash.
“Manufacturers are supportive of the principles behind the levy, but are clearly dismayed at the way it is being put into practice. The fact that just 1% of firms want to see the levy go into place in its current guise is pretty telling.
“While Government has made every step to engage employers in the process, the levy simply isn’t ready to roll out – half a year more in development could make all the difference between whether it succeeds or fails.”
Shadow business secretary Angela Eagle said: “I t is deeply worrying to see the sheer scale of uncertainty and unease among employers about the Government’s apprenticeship levy. “While we support the principle of the policy, the devil will be in the detail. The Government must work with employers to allay their concerns, and ensure that the system is fit for purpose.”
Skills Minister Nick Boles said: “For decades, British industry has under-invested in skills, and engineering businesses consistently complain about a shortage of higher technicians. “This is not a time for dither and delay: British industry needs to boost its investment in skills and the apprenticeship levy will ensure that it does.
“Since announcing the levy last year, we have worked with hundreds of employers, including EEF members, to design the system around their needs. “We know businesses want to understand how the levy will work for them, that’s why we published a detailed guide last month that is already being used by tens of thousands of employers.”
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