A recent survey, conducted by the Federation of Small Businesses (FSB), has found that more than a quarter of the UK’s small businesses believe the levy system, which was introduced to fund apprenticeship programmes and overhaul workplace training, has made it harder to run workplace training.
Although small firms are exempt from paying the levy and have 95 per cent of their apprenticeship training costs covered by the scheme, they employ 87 per cent of all apprentices in the UK.
However, since the introduction of the scheme in April 2017, the number of new apprenticeships has fallen significantly, and the firms surveyed have said that this is because ‘overly restrictive practices’ make it harder to operate the training.
Under the levy, employers with annual payrolls of more than £3 million must set aside the equivalent of 0.5 per cent of their total wage bill each year to fund workplace training.
However, the survey found that businesses are struggling to recruit people who meet the new standards and the managers to run the schemes, and they cannot meet the requirement for new apprentices to spend one-fifth of their working week in training.
According to the FSB, urgent action is required as there is a risk that many firms may not be able to afford to hire apprentices. Moreover, the group is calling on the Government to make it easier for businesses that come under the levy threshold to access the funding pot and to create financial incentives to encourage businesses that have never hired an apprentice to start doing so.