The Apprenticeship Levy – Will It Work?

In the last parliament, 2.3 million apprentices were trained in the UK. Therefore, the Apprenticeship Levy is an unsurprising initiative if the Conservative Party is to reach its target of training three million apprentices by the year 2020. The government’s targets and figures are relatively easy to memorize:

Number of apprenticeship places the government are aiming for: 3 Million

Businesses’ annual payroll threshold: £3 Million

Predicted sum of money to be raised from the levy: £3 Billion

The number three has become a recurring theme in Chancellor George Osborne’s aspirations to improve apprenticeship opportunities in the UK as he continues to tackle youth unemployment.  

Youth unemployment has actually dropped significantly over the past few years, and earlier this year it was reported that unemployment in the UK is still at a ten-year low with the figures of those registered as unemployed plummeting as we entered into 2016. The introduction of the living wage and the forthcoming Apprenticeship Levy are two schemes which have been put in place in order to encourage a working mentality. The legislations appear to be part of an effort to develop a pro-active mentality and a can-do positivity throughout the British workforce.

The introduction of the Apprenticeship Levy should lead to a significant increase in the number of apprenticeships available in the UK. It should also help drive engagement from small to medium sized businesses (SMEs) who make up the back-bone of businesses in the UK. The aim of the new structure surrounding the levy and the means by which businesses gain access to apprenticeship vouchers is to simplify the system and offer funds in the areas where it is most needed. As a result of this, opportunities will continue to grow and become widely available to 16-24 year olds who are keen to undertake apprenticeships in a wide array of contrasting job roles in both the public and private sector.

However, the new levy has not been met with positivity from all parties concerned. The biggest fear is related to how little information is currently out there regarding the exact details on the methods of taxation and the demands put on bigger businesses. Whilst it’s clear that the levy will work in principal, raising some much-needed funds, the knock on effect for larger businesses is yet unknown and many are left pondering the question “is a levy really necessary in order to develop a healthy apprenticeship system in the UK?”

Germany is a shining example of a country which is enjoying the benefits of a well-structured and healthy apprenticeship system. They are advocators of ‘dual training’, with employees splitting their time between the workplace and the classroom, developing a strong skill-set alongside educational training. There is no levy in place; larger firms invest a vast amount of time, energy, and some money into developing their apprentices. They see them as an investment and a sector of their workforce who provide a valuable contribution to their company – on the whole, it is a somewhat different approach to apprenticeships in the UK, but perhaps a direction in which we may move in further down the line.