Summary

We're inviting views on our proposal to implement an apprenticeships levy on employers.

Apprenticeships levy: employer owned apprenticeships training

Ref: BIS/15/477, 316KB, 30 pages

We’re inviting comments on our proposal to introduce an apprenticeship levy. The levy will enable employers to choose and pay for apprenticeship training.

We’re seeking your 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

This consultation covers the implementation of the levy. More detail on the levy rate and scope will be provided later in the year.

We particularly welcome views from employers, business organisations, training organisations and anyone with a vested interest.

Ways to respond

Respond online Complete a response form and either [email protected]

David Cameron will warn businesses back apprenticeships or lose UK Government contracts

David Cameron has restated the importance of apprenticeships to his vision of a “One Nation” Government.

CBI last month voiced concerns that the levy will do little to help small firms but Mr Cameron will insist his plans to create three million apprenticeships will give employers a workforce with the skills required.

Mr Cameron said: “The greatest asset any employer has is their workforce. And by investing in them, they are investing in the success and future of their business.

 “As a One Nation government, we are committed to supporting three million quality apprenticeships over the next five years – to help strengthen our economy, deliver the skills that employers need and give millions more hard-working people financial security and a brighter future.”

Mr Cameron also highlighted measures that will make the Government take a company’s apprenticeship offer into account when awarding large contracts and revealed a new range of industry apprenticeship standards for a range of professions including nuclear engineers and fashion assistants.

Skills Minister Nick Boles said: “Skilled people are the lifeblood of a strong economy but for too long UK businesses have invested too little in developing their employees’ skills to meet the demands of a competitive, global market.

“The apprenticeship levy will ensure that businesses invest in skills and training, and will act as a much needed shot in the arm for the country’s productivity.”

Meanwhile, Transport Secretary Patrick McLoughlin announced his desire to boost apprenticeships in road and rail industries, pledging 30,000 places by 2020.

John Longworth, director general at the British Chambers of Commerce (BCC), said the focus should be on creating quality apprenticeships rather than hitting an arbitrary target.

He said: “It is right that the Government is seeking to engage businesses and consult on the introduction of an apprenticeship levy to make sure this policy is properly thought-through.

“Apprenticeship schemes can play a part in meeting important ambitions to boost skills and drive-up productivity. But for apprenticeships to take hold and become established, the focus should be on quality – not hitting an arbitrary figure. The conveyor belt model is not what business wants to see.

“If the quality is there, the demand, from employers and potential apprentices, will follow.

“BCC research shows that greater engagement with smaller businesses is needed to increase apprenticeship take-up. Government policy is currently too focused on major employers, but equal effort ought to be put on encouraging and supporting smaller businesses to offer apprenticeships.”

Companies bidding for government contracts worth over ￡10m will be expected to demonstrate a clear commitment to apprenticeships, David Cameron has announced, as part of a government push to create three million more apprenticeship places this parliament.

From 1 September 2015, all bids for government procurement contracts – which are worth ￡50bn a year – will be expected to demonstrate that they have “a reasonable proportion” of their workforce in an apprenticeship or formal training programme.

The levy on large employers in England who train apprentices is expected to be introduced by April 2017 and will supplement government funding for more apprenticeships. Funds raised will provide participating employers with a digital voucher that can be used to buy training.

Levies on businesses are used to finance apprenticeships in over 50 countries, including France, Netherlands, Denmark and South Korea, but the amount that UK businesses have invested in training has fallen consistently over the last 20 years.

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