Magazine article Times Educational Supplement

Businesses Fear the Levy Is a Tax, Not a Skills System

Magazine article Times Educational Supplement

Businesses Fear the Levy Is a Tax, Not a Skills System

Article excerpt

Over the past few months, I've lost count of the conversations I've had with friends and colleagues who work in further education that have started: "Of course, we are in different places when it comes to the apprenticeship levy..."

Now, you don't have to go far into the press to find real concern voiced by businesses. The CBI has been vocal. We're not alone - groups like the Chartered Institute of Personnel and Development and the EEF manufacturers' organisation, as well as many individual employers, have been clear.

But to assume that this concern represents a different overall view to colleges and other skills providers just isn't right. The CBI - and our members - aren't against a big increase in training. Nor have we ever argued against businesses paying their share. The key is quality and encouraging investment.

Delivering more quality training is a vital part of the CBI's new prosperity agenda and something we hope to make real progress on over this Parliament. For us, quality means good wage returns for learners and closing skills gaps for businesses. It means relevant and timely programmes for companies and transferable skills for employees.

And that's the problem. It's why you have heard so many grumbles. Without a radical rethink, this levy just isn't going to deliver.

First, the incentives for firms don't work. Levy funds will be spread very thinly. So thinly, in fact, that it will be next to impossible for many firms to get their money back - even when they make big new commitments.

In fact, each new apprenticeship will actually cost a business a lot more to create than they will be able to recoup through the levy. This imbalance encourages companies to view the levy as a tax, not a skills system. It raises the suspicion that this is primarily a fiscal policy.

This issue can be addressed. We'll be looking to make sure that the forthcoming rates of repayment for the new system fully cover costs and that a route is found that enables firms to recover their legitimate spending on capital and staff time. …

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