The Construction Industry Training Board (CITB) is concerned that the government’s planned new apprenticeship tax will decrease funding for construction apprenticeships by up to 30 per cent.
In April of next year, all UK firms with a yearly pay expenditure of more than £3 million will be required to invest in apprenticeships under the new tax.
DoE proposals to grade apprenticeships into various new bands with varying funding levels from £1,500 to £27,000 were unveiled today.
Steve Hearty, head of apprenticeships at CITB, says: “The Government’s proposed funding bands for framework apprenticeships raise real concerns for the construction industry.
“We support the new, employer-designed standards, because we think they will improve the quality of apprenticeships, and it is encouraging to note that Government state these will be funded at a higher rate than those recently published. Although no construction standards have been established, we are continuing to work within the current parameters and may do so long through 2017.
Construction apprenticeship funding will be reduced by 20% to 30% even with the government’s proposed funding bands, notwithstanding the sector-beneficial STEM budget increases.
“We are concerned that training providers could stop training or they could ask employers to make up the shortfall in cost, which might deter firms from taking apprentices on.
“We have shared our concerns with DfE and will be doing formally through the formal consultation process that closes on 5 September. Employers can do the same.”
Aside from saying “time and care” should be taken with the delivery and terms of the tax, the BSRIA also welcomed the government’s emphasis on increased investment in apprenticeships.
Julia Evans, chief executive of the member-based association, which provides professional services in construction and building services, said: “There is a concern that the apprenticeship levy could run the risk of being compromised by hasty deadlines. Government must take time to do this properly.
“What is paramount is the critical importance of closing the industry skills gap. Apprenticeships provide the backbone for a career in engineering for many employees and future employees within the business and no compromises should be made respecting them.
Businesses will be required to pay an apprenticeship fee as well as the annual CITB fee beginning next year, according to our understanding from the CITB.
“Under the plans, employers below the £3m levy-paying threshold will only have to pay 10 per cent contributions towards the cost of training and assessment, meaning most small employers should not end up paying more towards training costs than they currently do.
It doesn’t matter that many of our members won’t pay twice because the larger corporations (with levy-paying thresholds of $3 million and more) are the ones that must pay twice. Such enterprises should also be permitted to lead by example on skills, training and industry careers, which this levy will not enable them to do. The government’s lack of long-term planning is regrettable.