Updates on the Apprenticeship Levy

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Apprentice training in the UK is undergoing changes as the government looks to make the process more responsive to employers’ needs.

In the construction sector, the Apprenticeship Levy is proving to be unpopular, as it does not consider the way that the industry works.

Any organisation that has a wage bill of over £3m annually must pay the levy. HMRC puts 0.5% of the bill into a digital account, which the government then tops up by 10%. Around 2% of all employers are currently paying the levy.

There are two issues with this in the construction industry. The first is that companies must use the digital account funds within two years. Otherwise, the Treasury keeps the money. Secondly, in construction, most apprenticeships take place through small companies that do not have a wage bill that tops £3m. CITB Policy Director Steve Radley believes that two-thirds of apprenticeships are with businesses that employ under 50 staff. The FMB believes this figure to be 68%.

Upon the Apprenticeship Levy’s introduction, it contained a provision that allowed larger companies to pass on 10% of their levy vouchers to the smaller companies in their supply chains. This recently increased to 25%, but many would like it to rise to 100%.

Sarah McMonagle of FMB said: “It should be 100%. What’s happening is that the larger companies are using the Apprenticeship Levy to train apprentices in office administration to recoup their contributions because they can’t spend it on training the bricklayers, carpenters and joiners that the industry needs.”