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Third of UK manufacturers see no benefits from apprenticeship levy

Staff Writer | March 3, 2017
Over a third of British manufacturers see no benefits to the government's proposed apprenticeship levy, a survey of the industry has found.
UK apprenticeship
Britain   0.5% of the payroll into the scheme
Many manufacturers see the apprenticeship levy - where about companies with a payroll of £3m or more, which represents roughly the largest 2% of UK businesses, will from April 6 will be required to invest 0.5% of this payroll into the government's apprenticeship scheme - as a "tax on business", according to industry body the EEF.

The organisation said that although manufacturers were warming to the levy, with a quarter of those surveyed by the EEF believing it will increase the quality of apprenticeship and a further quarter expecting it to attract more young people, they have reservations about its viability and long-term prospects.

The levy will come into effect on the first day of the new tax year and the government hopes it will increase the number of apprenticeships in England to three million by 2020. Businesses that pay the levy will still have access to government funding to go towards costs for apprenticeships.

The report by EEF and Lloyds Bank Commercial Banking surveyed 114 senior company executive in the manufacturing and engineering sector and found that 75% are worried they will not get back what they put in.

While 61% were concerned about cost, half of those surveyed were concerned about the timescale to implement the levey and 44% had apprehensions over the uncertainty about the future rule and rate changes to levy.

However, EEF said that manufacturers that operate across the UK with employees in Scotland, Wales or Northern Ireland would lose out on funding because of an incompatibility between the levy and devolved skills policy across the country.