Government needs to rethink apprenticeship levy

Ian Mean
Director of Business West Gloucestershire | Business West
21st May 2019

Gloucestershire has a proud record of encouraging apprenticeships.

South Gloucestershire & Stroud College (SGS) - have been superb at developing these apprenticeships.

But I have to say that Further Education colleges like SGS are now struggling to meet apprenticeship targets through cuts in funding due to an underestimate by Government of the demand from small employers who see apprentices as their lifeline to future growth.

In my view, the blame lies fairly and squarely with the Government, which trumpeted there would be 3 million apprenticeships created by the end of this parliament in 2020.

I think that target will be missed by a mile while the whole apprenticeship system, which is so very important to the economy and the future careers of your young people, is now on a cliff edge.

At the heart of the crisis is the Apprenticeship Levy - paid by companies with a wage bill of over £3million a year.

It is an absolute fiasco.

Sara-Jane Watkins, College Principal of South Gloucestershire and Stroud College agrees with me.

She told me: “Many major companies are now contributing to the Apprenticeship Levy pot and for many this is being viewed as a tax. 

“Lots of large companies are now not spending their levy and rather than transferring this money to the restricted non-levy pot, which benefits smaller employers to recruit apprentices, the money is being held back by Treasury.  

“This money desperately needs reinvesting into the further education sector to help both with apprenticeship growth opportunities for SMEs but also to help develop our estate and resources.

“Colleges must have the cutting edge facilities that our future generation of learners require in order to be able to keep pace with world-wide skills in a globally competitive environment.”

The red tape behind taking on an apprentice is complicated enough.

But the fog and complexity surrounding the Levy seems to be worse. I hear this from companies all the time.

The government needs to re-organise the Levy completely or scrap it.

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