New research released by the Institute of Directors (IoD) today reveals that less than one in seven (14 per cent) of those employers paying the apprenticeship levy actually think it is fit for purpose.
In contrast, more than a quarter (27 per cent) complain that it is too difficult to navigate and understand, and more than one in three (33 per cent) say that it has not been designed with their training and skills needs in mind.
Less than one in three firms (28 per cent) paying the levy will bother reclaiming their full entitlement to train apprentices. One in seven (14 per cent) organisations view the levy as just another tax and will not claim any of the funds they are entitled to.
Less than one in five (19 per cent) will use their levy payments to take on more apprentices than they otherwise would. A similar proportion (21 per cent) plan to simply reallocate their existing training budget to train apprentices.
Just four per cent of company bosses view apprenticeships as the best form of training to meet their skills needs, according to the survey of more than 600 IoD members, which was conducted this month.
Calls for change
Seamus Nevin, the IoD’s head of policy research, said: “The apprenticeship levy is not working as intended”.
He added that the new system “is not helping firms to invest in skills and train in a way that best suits the needs of our economy”.
Many employers are unable to make “the complex and restrictive rules fit their specific training requirements,” according to Mr Nevin.
He said: “We strongly advise that the levy and co-funding system are reviewed in order to give employers the flexibility to develop the skills they need to be competitive, and to avoid any further drop in apprenticeship recruitment and training volumes”.
The research “shows that there is still a major job to sell the benefits of the programme to employers,” according to Mark Dawe, chief executive, the Association of Employment and Learning Providers.
He said: “The IoD is right to highlight that some of the rules around the new reforms are acting as barriers to engagement”.
Fall in apprenticeships
The concerns come as new figures released by the Department for Education today show a 25 per cent drop in the number of apprenticeships over the past year, something that has prompted the Confederation of British Industry (CBI) to demand action.
Neil Carberry, CBI managing director, said: “This worrying data should be the final wake-up call for the Government that the Apprenticeship Levy is not working as intended”. Although business supports the levy in principle, “its current form does not encourage more investment in high-quality training,” he said.
Mr Carberry added: “There is still time to get the Levy right, but this needs action now” and called on the government to “loosen the rules on what happens to the Levy cash itself”.
He said: “Companies should be able to draw down far more from the Levy pot - up to 50 per cent. This will help firms to work with others to create centres of excellence for apprenticeship training and improve access to apprenticeships for smaller firms”.
Government response
Responding to the criticism of the levy, apprenticeships and skills minister Anne Milton said: “The apprenticeship levy is a really important feature of the changes we made to raise the quality of apprenticeships”.
“It means there is long-term investment in apprenticeship training so that employers get the skills they need to grow their business and people of all ages and backgrounds get quality training and are able to get on in life”.
The minister added: “I have met many businesses who are using the levy to launch excellent programmes and I am sure that many others will do the same”.
Ms Milton also pointed to a “growing number of apprenticeship starts under the new high-quality standards showing that we are delivering quality training that will meet the need of business”.
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