Government plans to introduce a new all-industry apprenticeship levy could do more harm than good for the construction industry, according to concerns raised by BSRIA.
The new apprenticeship levy would come into effect from April 2017, and the proposals are currently under consultation, with Government seeking views on:
• Paying 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
In its response, BSRIA has raised concerns over the new levy’s impact on the current system in place for the construction industry, which already pays a statutory levy to the Construction Industry Training Board (CITB). For one thing, it said its members are “in the dark” as to whether they must pay this existing construction-only levy alongside the new all-industry levy; for another, it has warned that the shake-up could “kill off” the CITB.
“Quality apprenticeships are essential for our industry to help strengthen the economy, deliver the skills that employers need and give millions more hardworking people financial security and a brighter future,” said Julia Evans, BSRIA’s chief executive. “Skilled people are the lifeblood of a strong economy to meet the demands of a competitive, global market. We hope that our members don’t have to pay such levies twice over and that the future of the CITB is safe – especially as the training it provides is dedicated to the construction industry.
“Another concern is the impact of the levy on the SME (small and medium enterprises) where most apprenticeships are situated. Given that 99.9% of construction companies are SMEs, the future and livelihood of their apprentices could be under threat if larger companies resent contributing towards this new levy, smaller businesses will inevitably feel the impact. These are worrying times for the outlook of our industry’s workforce.”
The Government’s consultation document states that the apprenticeship levy will be economy wide and larger employers in the construction and engineering construction industries will be in scope of the levy alongside all other larger employers in the UK economy.
On that basis government and the industries need to decide how best the existing levy arrangements respond to the apprenticeship levy.
One option is for employers in the construction and engineering construction industries to pay the new apprenticeship levy while continuing to pay the existing industry levy and if this were to happen, the CITB would expect companies in the industries to fund their apprenticeships using the apprenticeship levy, according to BSRIA.
Another option is to potentially remove the statutory industry levy arrangements completely, so that employers only pay the apprenticeship levy. This would represent a “significant” change to training arrangements in the construction and engineering construction industries and CITB would need to understand what effects this would have on the skills and capabilities of the UK construction industry.
Both the CITB and the Engineering Construction Industry Training Board will consult with employers before the introduction of the apprenticeship levy on whether they should continue to pay the industry levy.
This move forms part of the Government’s pledge to support 3 million apprenticeships by 2020, include a requirement to take a company’s apprenticeship offer into account when awarding large government contracts, and publishing new industry standards so apprentices have the skills that firms need.