Shake-up of apprenticeship levy a sign government is listening to business

Ian Mean
Director of Business West Gloucestershire | Business West
1st October 2018

At long last, the government seems to be trying to listen to business.

That was my feeling following Chancellor Philip Hammond’s speech on the first day of the Tory conference in Birmingham today.

At long last, we might say, after a year in which business, particularly SMEs, felt as if they were being frozen out of the Downing Street agenda seemingly immersed the Brexit bubble to the exclusion of almost anything else.

Philip Hammond has obviously listened to the siren voices - including Business West - who have been saying for the last six months that the Apprenticeship Levy introduced last April had to be changed.

Today he announced that long overdue review of the Apprenticeship Levy process.

Not before time. 

Since the levy came in last April, it has been chaotic with many larger companies simply using the cash not to take on and train apprentices but putting the money into areas of management training, for instance.

At the same time, apprenticeship starts have fallen off a cliff with - more than 50 per cent down nationally in the last year - at a time when we need all the new, young skilled workers we can get here in Gloucestershire. 

And as a result, the much vaunted government apprenticeship programme which was targeted at delivering 3million apprenticeship starts by 2020 now looks pretty impossible to achieve.

Reviewing the levy is a first step in the right direction to get the government closer to business, and by his own admission today, Philip Hammond said they may have to do more to make the levy more flexible.

It is an overly bureaucratic ill thought-out policy that is patently not working. In fact, the levy is actually proving a deterrent to recruiting apprentices which our colleges have not seen before.

And I am afraid that many companies now see the levy as a tax.

At least, the Chancellor’s announcement was something tangible to give business something to smile about after the recent Boris Johnson tirade of ‘**** business’.

And the Chancellor felt he today had to make a pledge that “the Conservative Party will always be the party of business”.

That is welcome after a year in which business - particularly small business - has very much seemed to be out in the cold in terms of government thinking as No 10 immersed itself in the Brexit bubble to the exclusion of virtually everything else.

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