The government must collaborate with business to ‘radically rethink’ the design of the apprenticeship levy, according to Carolyn Fairbairn, director-general of the CBI.
Speaking to an audience of business leaders, Fairbairn warned that the government must “take the time to draw on business' vast experience to make sure that the levy works for everyone, rather than rushing out a poorly thought-through plan". "This isn’t what businesses want, and we don’t believe it is what the government wants either," she added.
The apprenticeship levy, which comes into force in April 2017, will require all employers operating in the UK with a pay bill over £3 million each year to make an investment in apprenticeships.
The CBI is calling for:
- A stronger role for the new Institute for Apprenticeships, including measuring and managing the system around the levy.
- More flexibility in how firms can spend the levy, including on existing training and high-quality support for apprentices.
- The digital system that manages levy spend to be ready and able to support the delivery of apprenticeship training in full and from the start.
Fairbairn said the the Institute risks being viewed as an afterthought. "Instead of this, we think the Institute should be a ‘standard-bearer’ with the authority to shape big decisions on design," she explained. “These would include measuring and managing the system around the levy, and establishing success criteria that measure how it supports careers and closes the skills gap.”
She also expressed concern over how apprenticeships are being defined for the levy, warning that some employers are being forced to change their graduate or training schemes – which currently work well for them – to fit what the government categorises as an apprenticeship.
“The levy misunderstands training only as apprenticeships, and the current design encourages firms to rebadge their existing programmes," Fairbairn warned. “When it comes to training business knows best. They should have the flexibility to choose the kind of training that is right for them, whether it’s labelled an ‘apprenticeship’ or not."