From April, employers with wage bills of more than £3m will be required to put 0.5% of their payroll into the levy to fund apprenticeships. A third of employers liable to pay the new Apprenticeship Levy from April are not even aware of its existence, suggests research.
A similar number of employers, polled for City and Guilds, said the levy, aimed at boosting apprentice numbers, would encourage them to hire more.Some said they would cut training budgets to pay it.
The City and Guilds skills group polled 500 senior decision makers from a range of organizations about the impact of the impending changes to the apprenticeship system.
The results showed:
Only 33% felt fully informed about the new rules
A total of 28% were not sure whether it would affect their business
Only 31% said they would hire more apprentices because of the levy
And 15% said they would have to cut other recruitment schemes to pay it
The survey also showed 87% of employers were struggling to fill vacancies, with 29% agreeing this was true of apprenticeship places. Overall, 47% felt the levy was a good way to get employers to pay for training, 43% said it gave them more control and 34% believed it would improve quality.
City and Guilds managing director Kirstie Donnelly said lack of awareness of the new system was “a cause for concern”. We still have a hill to climb in convincing people about the benefits apprentices can bring to business. It was vital for government to communicate with “less enlightened businesses to help them see the huge potential benefits apprenticeships can bring”, she added.
She called for parity of esteem between academic and professional and technical education, with more impartial careers advice and “a follow-through on the promise to create a new UCAS-style system for apprenticeships”.
A Department for Education spokesman said the levy would boost economic activity and improve skills.
The government said the levy would “give millions a step on the ladder of opportunity”. The aim is to double spending on apprentices in England, resulting in three million new apprenticeships. From May, employers will be able to draw vouchers from the levy to fund apprentices.
“Employers are at the heart of our apprenticeship reforms and have been working with us since 2013 to create the apprenticeship standards and ensure they are high quality and deliver the skills that they need.
“We have also published a detailed levy guide for employers and an online calculator that enables them to understand how much levy they will pay and how they could use their digital funds to pay for training in future,” said the spokesman.
The spokesman said the government would support employers in using funds from the levy for apprenticeships, while the DfE and Skills Funding Agency was working with employers to create apprenticeships across all sectors.
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