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by Roger Merchant

17 January 2018

To assist the Government in meeting its target of creating 3 million apprenticeships, the “Apprenticeship Levy” was introduced last April. It required all large employers to pay 0.5% of their payroll cost into a fund, which they could then use to pay for accredited training schemes. This assumed that employers would want to invest in Apprenticeships, rather than just pay this money to the Government like a tax. The Government hoped the fund would also be sufficient to heavily subsidise apprenticeships for smaller companies.

So far it hasn’t worked.  In Leicestershire, consistent with the rest of the country, the number of apprenticeships has fallen rapidly.  Worst still, existing training schemes are now being lodged as apprenticeships, so reducing the real level of new apprenticeships in the official figures.

What can be done?  The Government argues that it is early days and it will all come right in the end.  Most experts and employers think that a radical overhaul is needed to dramatically reduce the bureaucracy involved, perhaps even to reduce or scrap the levy and target incentives where they can positively assist employees to build the skills they need in an ever changing workplace.

Understanding the Apprenticeship Levy



Roger Merchant is a Partner at UHY Hacker Young LLP

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