A study by the British Chambers of Commerce (BCC) showed that two out of five firms either did not understand or did not know about the levy, which comes into force next April. The survey of 1,600 business leaders also found that most believed the new levy felt more like a tax.
From next April all employers in the UK with an annual pay bill over £3 million will have to contribute to the levy at a rate of 0.5% of their annual pay bill, raising an estimated £3 billion towards creating more apprenticeships.
The BCC said its survey showed that the Government had so far failed to adequately communicate its apprenticeship funding policy.
Marcus Mason, head of education and skills at the BCC, said: “Firms value apprenticeships as way of developing skills and increasing productivity. However, with just six months to go until the levy is introduced, our research shows the Government needs to step up its communication to business.
“The Government needs to ensure that businesses understand how they could benefit from the reforms, because if it just feels like yet another tax then then the policy will have failed. Devolved administrations also need to provide a guarantee that the money raised is ring-fenced and kept for training.
“The Government should allow businesses to use the levy funding to support other high-quality workplace training or there is a risk of displacing other valid forms of training. Fundamentally, treating apprenticeships as a numbers game would benefit neither businesses nor apprentices themselves.”
David Williams of Middlesex University, which helped with the report, added: ” It is really important that government communicates to businesses the value of the levy in terms of its use to drive up the quality of on-the-job training and development.”
The report was published at a business and education summit being held by the BCC in London.
Skills and apprenticeships minister Robert Halfon said: “We have been working closely with employers and providers of all sizes through roundtables, meetings, events and webinars to determine how the levy will work for them, and we will continue to do so.
“We are listening to what they have to say to ensure the levy delivers for all – including the apprentices themselves.
“Through the levy, £2.5 billion will be invested in apprenticeships by 2019-20 – twice what was spent in 2010-11.
“Small businesses will not have to pay training costs for 16-to-18-year-old apprentices. This investment will create a ladder of opportunity for millions of people and give businesses the skills they need now and for the future.”
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