With only a year left to go until the apprenticeship levy comes into full effect, many employers are divided in their opinions of the knock on consequences that the new system will bring. Whilst many think the new levy is unfair and unworkable, others consider it to be a major step forward in tackling the skills shortage in the digital skills sector.
But whilst both parties may have very valid points, what’s next for employers in the trade sector who rely on apprenticeship schemes to get a leg up on the careers ladder? Well firstly it’s worth considering the results that the new levy will have on wages and job positions. Although more school leavers than ever before are looking for a skilled trade rather than progressing with an office based role, the changes in the budget for apprenticeships will definitely result in job losses and a lack of apprenticeship places becoming available.
Carolyne Fairbairn, the head of the Confederation of British Industry (CBI) stated that the government needed to work with businesses to re-think the levy or risk a lack of opportunities for new recruits.
“The levy misunderstands training only as apprenticeships, and the current design encourages firms to rebadge their existing programmes,” Fairbairn warned. “When it comes to training, business knows best. They should have the flexibility to choose the kind of training that is right for them, whether it’s labelled an ‘apprenticeship’ or not.”
Many other industry experts are weighing in on this argument and are arguing that as well as job losses and cuts to training budgets, there’s a definite possibility that wages might be shaved to balance the impact. The major factor behind all of this is the uncertainty that still remains around the levy, with the government still failing to release key information to the economy.
Businesses with a pay bill of £3 million or more are still to find out how they will be charged, and SMEs are yet to find out how they will access apprenticeships. However, the bigger uncertainty surrounds the knock-on effects, with businesses mentioning a number of potential big issues. For instance, 30% of large employers say they think the levy will take funding away from other forms of workforce development and in-work training.
Although the trade sector is failing to get the help it requires with improved apprenticeship schemes and effective budgets, other sectors such as the technology industry are welcoming the levy. Many company directors in this sector feel that the levy will incentivise potential employees that don’t currently have any. They also feel that those who invest in apprentices will continue to do so because of the new support the levy provides to these industries.
But whilst this side of the economy will gain considerable benefits, they are also unsure about whether businesses investing in apprentices will receive enough money back to cover what they put in. With so many uncertainties across the board, we’ll need to wait until further news is released over the next month or so before we can ascertain exactly what long-term effects the levy will bring.
As soon as we hear what will be happening, we’ll bring you all the details you’ll need to know to future-proof your business.