Firms remain in the dark about how best to utilise Apprenticeship Levy

The British Chamber of Commerce, in partnership with Middlesex University London, has released part three of its annual workforce survey, which looks at how businesses are adapting to the Apprenticeship Levy.

Annabel Hibbert (Engineering Higher Apprentice) and Tom Zalewski (Advanced Technical Apprentice) at Rolls-Royce’s Apprenticeship Academy, Derby.
Nearly a quarter (23%) of levy-paying firms have no understanding of the Apprenticeship Levy or don’t know how their company will respond to it.

The British Chambers of Commerce (BCC) surveyed over 1,400 business people from all regions of the UK online to understand how the introduction of the Apprenticeship Levy is affecting UK businesses.

The survey, held in partnership with Middlesex University London, shows that businesses remain in the dark about how best to utilise the Apprenticeship Levy, six months after it was introduced.

Nearly a quarter (23%) of levy-paying firms have no understanding of the Apprenticeship Levy or don’t know how their company will respond to it.

Businesses with a pay-bill of less than £3m fall under the levy threshold but can still apply for apprentice funding, yet the findings of the survey show 66% of these companies haven’t taken any direct action to use the funds or don’t know about it.

For over half of levy-paying businesses, it represents an added cost, with 56% not expecting to recover any or only a portion of their payment, compared to 36% who expect to recover all or more of their payment.

Jane Gratton, head of business environment and skills British Chambers of Commerce said: “For many businesses who pay the Apprenticeship Levy, it can feel like an additional employment tax, much of which they are unable to recover, and one that is deflecting training budgets away from other important training needs.

“Firms need greater flexibility on how they can use their levy monies and a system that is fully operational as quickly as possible, is simple and efficient, and that enables them to access good quality training.”

The findings reinforce the need for clearer guidance and support for businesses wanting to utilise the Apprenticeship Levy.

Firms, both above and below the levy threshold, are uncertain about how to use the funds to find and train the skills they need, undermining the purpose of the system