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Apprenticeship Levy: Businesses remain concerned but undeterred

Apprenticeship Levy: Businesses remain concerned but undeterred

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    Responses to Eversheds Sutherland’s Apprenticeship Levy survey: surprisingly positive signs

    A survey by Eversheds Sutherland – An alternative picture – has found that although many businesses are critical of the operation of the Apprenticeship Levy, there are indications that positivity around its potential benefits could be on the up.

    Skills shortages present an ongoing challenge for many employers. To help tackle this issue, the Government introduced the Apprenticeship Levy in April last year with the ambitious aim of supporting three million new apprenticeships by 2020. Since then, organisations with an annual salary bill of £3 million or more have been obliged to contribute to an Apprenticeship Levy.

    However, early reports highlighted various issues with the new system and its accessibility, with some statistics even suggesting that the Levy has actually led to a serious decline in new apprenticeships, rather than an increase.

    Almost a year on from its introduction, global legal practice Eversheds Sutherland has sought feedback from a range of more than 100 employers from both the private and public sectors on how they are responding to the Levy.

    The top five sectors of those who responded include employers from: education (15%); manufacturing (14%); finance (12%); professional services (11%); and Local Government (9%).

    Although the findings still indicate continued confusion around the Levy and how it can be used, 54% of respondents claim to have taken on more apprentices since its introduction, with 43% of apprentices being aged 19-25.

    Perhaps more notable is the fact that 62% of those who responded believe the Levy has directly resulted in their organisation introducing or increasing apprenticeships, while 70% of respondents expect the number of apprenticeship places offered in their organisation to increase in the next 12 months.

    Michael Burns, employment Partner, Eversheds Sutherland, said:

    “Mixed messages are still emerging in terms of awareness and take up of the Apprenticeship Levy, from indications that many employers are still in the dark as to how it operates, to provisional Government statistics last year, which appear to indicate a substantial fall – not the expected rise - in the number of apprenticeships starts since May 2017.

    “Whilst a snapshot only, the results of our poll indicate an outlook that is more heartening than the early Department of Education (DofE) figures suggest. Although the broad range of employers who did respond identified some concerns with the operation and complexity or accessibility of the Levy, most indicate a rise in apprenticeships since its introduction, with a large proportion attributing this to the Levy itself.

    “Moreover, a significant majority (70%) anticipates a rise in apprenticeship numbers within their organisation in the next 12 months.

    “Our survey results were something of a surprise in terms of their positivity, particularly against a backdrop of negative press and clear teething problems with the Levy. However, the very positive response and optimism regarding the question of future apprenticeship places would seem to suggest that, whilst the Levy has so far failed to make significant inroads in new apprenticeships of anything like the three million desired by Government, neither has it proved a major impediment to growth in this area. Whether this is because or in spite of the Levy remains to be seen once more up-to-date figures are collated by the DofE.”

    Burns continued:

    “Nonetheless, what is clear is that more needs to be done by the Government if its Levy objectives are to be met and apprenticeships are to offer a substantial means by which employers can address growing skills challenges.

    “The Matthew Taylor review of Modern Working Practices published last year, also highlights the limited reach of the Levy, with more and more workers in the gig economy struggling to access workplace training but being out of reach of the Levy. His review recommends that the Institute of Apprenticeships should be tasked to work with sectors using high levels of lower-paying and atypical workers to ensure they are making the best use of the current apprenticeship framework.”


    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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