Changes to Apprentice Levy announced

“There is huge appetite out there to take on apprentices,” said Tony Howard.

“There is huge appetite out there to take on apprentices,” said Tony Howard.

The government’s decision to ease restrictions on how Apprenticeship Levy funds are distributed has been praised by the Building Engineering Services Association (BESA).

From July, large firms who pay the Levy will be able to transfer up to ten per cent of their funds annually to multiple supply chain partners.

Previously, a levy-payer was only able to share funds with one other employer, but Apprenticeships and Skills Minister Anne Milton has relaxed that rule in the face of concerted pressure from industry.

“This is great news,” said director of BESA Training, Tony Howard. “It is something we have been fighting for since the Levy started last year and was originally supposed to start in April. Sharing the funding in this way will allow many more small and medium enterprises SMEs to invest in apprentices.”

Only around two per cent of employers actually pay into the Levy – those with annual payrolls of £3 million and above – but the estimated annual pot of £3 billion is intended to be used by all employers to subsidise apprentice recruitment and training. However, there has been considerable confusion about how non-levy paying firms could gain access to the money.

The government intended the Levy to play a key role in its plans to deliver three million new apprenticeships by 2020, but figures released by the Department for Education earlier this year revealed a 28% drop in new apprentice starts since its launch.

“The fall in numbers was no surprise because there was total confusion about where the levy money was going,” said Tony. “The principal behind the Levy is sound, but small employers were struggling to access funds for specialist training provision – as opposed to the mainstream plumbing and electrical provision that was being offered to them by the further education sector. Also, many large companies were not using the full amount they paid in.

“This decision is another step towards giving employers real flexibility because they will have the power of the fund to choose the provision they want. This should result in a steady rise in apprentice numbers over the next few years.”