Organisations across the UK’s business community have commented on the government’s ‘Productivity Plan.’ Verastar reviews these comments to evaluate how the UK’s business community has reacted to government plans to introduce an ‘apprenticeship levy.’
Productivity Plan
Earlier this year the government unveiled it’s ‘Productivity Plan,’ which outlined how Whitehall hopes to reform the UK’s Further Education sector to raise productivity levels. Proposed measures include the introduction of an apprenticeship levy, further devolution, and establishment of pre-learner funding for adult education.
In July the chair of the House of Commons Business, Innovation and Skills Select Committee (BIS), Iain Wright, launched an official enquiry of the Productivity Plan. He invited business organisations, further education bodies and other interested parties to provide insight on the programme’s ability to resolve the key underlying causes which have kept UK productivity levels at historic lows.
Apprenticeship levy
The BIS specifically asked organisations to assess the proposed introduction of an apprenticeship levy. They stated that the levy will allow employees, especially UK small to medium sized enterprises (SMEs), “to choose and pay for apprenticeship training.”
The BIS asked organisations to comment on how the levy should be paid and how it should work for employers. They also invited commentary on how BIS can ensure employers can benefit from investing in apprenticeships and how the government can provide employers with control of apprenticeships. The consultation for the apprenticeship levy closed on 2nd October 2015; a number of organisations in the UK’s business community submitted their assessments of the proposal.
Application to SMEs
According to FEWeek, the Association of Employment and Learning Providers (AELP) said: “AELP has recommended that the apprenticeship programme is built over the next three or four years while we carefully introduce a levy-based system. As the levy is only paid by large employers, there is a risk that only they will determine how the money is spent. The drive for productivity means that we have to engage SMEs who will deliver much of the growth in the programme.”
The Federation of Small Businesses commented: “The new employer-led apprenticeship system has the potential to address the skills gap in the UK, creating a system that is responsive to the skills and training needs of businesses. However, small businesses who are integral to achieving this ambitious target must not be priced out of taking on apprenticeships. The current uncertainty around how the funding model will apply to SMEs, what level of contribution these firms will be required to provide for training and the impact of the levy on small firms must be resolved as soon as possible.”
Working with employers
The Confederation of British Industry argued: “Government must give employers real control over standards, so that only business-relevant training is funded. It must also ensure that levy funds are only accessible by levy payers and that employers are consulted on the rate and reach of the levy — not simply on its implementation.”
The range of commentary provided to BIS indicates that there’s some appetite within the UK’s business community for the introduction of an apprenticeship levy. However, many bodies expressed concerns that the measure could price smaller businesses out of the apprenticeship market, a key issue BIS must address to ensure the Plan raises productivity throughout the UK’s SME community.
