The levy, which applies to employers with a paybill of more than £3m, is expected to apply to nursery chains with around 200 staff or more.
The tax is expected to fund a 3 million increase in apprenticeships across the country, raising £2.6bn, which will then spill over into a system of co-investment for small employers wanting to take apprentices.
The £2.6bn figure is less than the original £3bn treasury projection, with several in the sector citing concerns that there may not be enough money to pay for apprentices in SMEs.
Mark Dawe, CEO of the Association of Employment and Learning Providers, says, ‘Unless the Government guarantees a minimum £1bn in annual funding for the apprenticeships of small businesses over the longer term, we may have only a short window of two years to meet demand for apprenticeships in nurseries before the sector faces a major skills challenge again.’
Andrew Gladstone-Heighton, policy leader at qualification awarding body NCFE, says while he has ‘been given personal reassurance from senior sources at the Apprenticeship Delivery Service’ that the levy system ‘will create enough surplus to keep the supply of cash available for the … non-levy-payers’, he hasn’t seen the evidence. ‘The only real analysis I’ve seen on this matter has been through commentators and fellow policy analysts outside of government.’
The current apprenticeship framework has been updated Following the Department for Education’s recent U-turn on GCSEs, which saw the reinstatement of Functional Skills as a valid GCSE equivalent for a level 3 course.
Last week it emerged that, for apprentices who signed up to the old framework, workforce development body Skills for Care ‘will accept Functional Skills Level 2 for learners on the EYE framework’ and students on this framework who are rejected because they have Functional Skills could be resubmitted for certification to Apprenticeship Certificates England.
The GCSE requirement, which was in place for two and a half years, also led to a row between the Government and the former early years trailblazer group, who wanted functional skills reinstated because of the impact on recruitment. The DFE’s own research shows a 40 per cent decline in the number of level 3 childcare apprenticeship starts since the requirement was introduced.
The group, which devised but could not complete draft apprenticeship standards for early years apprentices because of the GCSE issue, was sacked over ‘slow progress’ in February. It has now been replaced with a group led by nursery chain Busy Bees. They hope to soon publish standards which will replace the frameworks currently being used.
MPs have called the levy a ‘blunt instrument’, and raised fears about its impact on the quality of training, while the IPPR says that it will worsen the North-South divide in training opportunities and jobs.
The DfE says, ‘The Government’s focus is on building a world-class education and skills system that will give everyone a chance to climb the ladder of opportunity to rewarding careers.
‘We are investing over £500 million a year of new funding for technical education and the apprenticeship levy will double the annual investment in apprenticeships to £2.5 billion by 2019-20.’
A spokesman added, ‘Quality is at the heart of our apprenticeship reforms. In recognition of that, we have approved a proposal led by Busy Bees Childcare to develop standards covering early years occupations.
‘The trailblazer will build on existing work on the standards, ensuring that they are up to date and meet the needs of the sector.’