Employers attack training levy as ‘little more than a tax on business’

2nd October 2015


The CBI and the manufacturer’s trade body the EEF have criticised Government plans to create three million apprenticeships by 2020.

The employers’ bodies are worried that they will face a levy to fund the scheme while they believe quality may be sacrificed to meet the target.

The Government says it will help end under-investment in training but employers representatives suggest that some jobs could simply be rebadged as apprenticeships.

Manufacturers’ organisation EEF describes the levy, which is likely to come into force in 2017 as little more than a tax on business”. In its response to the consultation, it is sceptical about the government achieving its 3m target, saying that a goal that would require 600,000 new apprenticeship starts every year.

Tim Thomas, EEF head of employment and skills policy, said: “Companies have serious concerns as to how the scheme will work in practice. If this proposal is to avoid being a pile-them-high, sell-them-cheap approach and actually increase the quality of apprenticeships as well as hitting the government’s 3m target, then the government must sit down with employers as a matter of urgency to design a workable scheme.”

The CBI says that all money raised by the new levy must be ringfenced for training and that the levy rate be set by a new politically independent levy board.

Katja Hall, CBI deputy director-general, said: “Business is committed to working with the government to tackle head-on the skills shortages many of our high-growth sectors face, and we have been vocal in our support of employer contributions in the past.

“But at a time when firms are already investing over £40bn a year on formal training and increasing apprenticeships, there is a high risk it could undermine the system not strengthen it.

“A new levy won’t be welcomed by business, so we want to see a new politically independent levy board setting the rate based on clear evidence with the funds ringfenced.”

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