The Chancellor is expected to use his speech at the Conservative Party Conference today to announce that employers will be able to share a quarter of their apprenticeship levy pots with their supply chain.
The Chancellor has already increased flexibility in June, when the government announced that employers could now share 10 per cent of their levy funds with their supply chain. In today’s speech, Mr Hammond is expected to increase this to 25 per cent.
This is likely to have a strong impact on the construction sector, where formal training apprenticeships are often not offered by larger firms, who nonetheless have larger budgets for apprenticeships. The Federation of Master Builders (FMB) have today welcomed the Chancellor’s intention to make the Apprenticeship Levy more flexible, so that it works for strategic industries such as the construction sector, but they do not believe the new reforms will go far enough.
Responding to the Chancellor’s speech at the Conservative Party Conference, Brian Berry, Chief Executive of the FMB, said:
“The Chancellor has, in part, listened to the concerns of business by making the Apprenticeship Levy more flexible. However, he needs to go much further.
“Currently ten per cent of Levy vouchers can be passed down through the supply chain from large firms to smaller firms and today, he increased this to 25 per cent. This is important as in construction, it’s the small firms that do the bulk of the training while the large firms don’t tend to directly employ or train tradespeople.
“Since the Apprenticeship Levy was introduced last year, apprenticeship starts have fallen in the construction trades by more than ten per cent. Given that the construction industry is already suffering from an acute skills shortage, this is very worrying indeed.
“If the Chancellor is serious about ensuring the Levy has the desired effect, and increases meaningful training across all sectors, it should go further and make 100 percent of the vouchers transferable from large to small companies.”