The levy was announced in the budget earlier this year by Chancellor George Osborne, who said, 'Our weak productivity shows that we don’t train enough'.
The move comes after the Government plans to enshrine its commitment to create 3 million new apprenticeships by the end of 2020 in law. Around 50% of large employers are engaged in apprenticeships.
The Government has said levy-funded apprenticeship training is common in other countries, and the move has prompted cautious support from some business leaders, with City & Guilds Group chief executive Chris Jones saying while it was a sustainable long term solution to creating more apprenticeships, it must not impose additional bureaucracy on businesses. However the CBI has described the policy as a 'blunt tool'.
The levy will only be paid by ‘large’ employers, and calculated on the basis of employee earnings paid via PAYE. The proceeds would be ringfenced for apprenticeship places.
The definition of large has not yet been set, but the Association of Employment and Learning Providers says it is working on the assumption this is 250 employees. No new details are included in the consultation on the funding of SMEs apprenticeships.
The consultation also asks if a proportion of the apprenticeship funding raised from larger companies should be used to support apprenticeship training by smaller companies that have not paid the levy.
The consultation is seeking views on:
- how to pay the levy
- how the levy should work for employers who operate across the whole of the UK
- how to make sure that employers paying the levy have the opportunity to get more out than they put in
- how best to give employers control of apprenticeships
The consultation closes at 11.45pm and can be found here