Javid ‘to broaden the apprenticeship levy into a wider skills levy’

Further tweaks to the apprenticeship levy look certain to be made in the autumn, when new chancellor Savid Javid is expected to deliver his first Budget.

In his final Budget speech in October 2018, former chancellor Philip Hammond halved the amount small firms taking on apprentices had to pay from 10% to 5%.

But Javid revealed his intention “to broaden the apprenticeship levy into a wider skills levy” when writing in the Financial Times shortly after his appointment.

“This would give employers the flexibility they need to train their workforce, while ensuring they continue to back apprenticeships”, Hammond’s successor said.

The levy was introduced in April 2017 and requires employers with annual pay bills of more than £3 million to allocate a sum equal to 0.5% of their wage bill.

The proceeds go towards a collective apprenticeships pot, which is used to fund work-based training schemes.

It has been under fire ever since, with several campaign groups claiming the measure is not fit for purpose.

The Recruitment and Employment Confederation (REC) backed Javid’s comments and urged him to deliver on his pledge.

Sophie Wingfield, head of policy at the REC, said:

“Sajid Javid’s recognition of the need to reform the apprenticeship levy is welcome.

“The levy was implemented with the best of intentions, and could help benefit the progression opportunities for many more workers if it is used for broader training.

“Locking out temporary workers needs to end so that critical industries facing skills shortages, like hospitality and social care, can access the talent they need.”

The REC’s comments echo those made earlier this year by the Institute of Directors (IoD), which said the Government “should not shy away from broadening the scope of the levy”.

Stephen Martin, director-general at the IoD, said:

“Opening out the system to encompass other forms of training would be to the benefit of employer and employee alike.”

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