Joel Muckett 2 Oct 2017 10:03am

Companies still confused by apprenticeship levy

One in four businesses still do not know how the apprenticeship levy works, a study by The British Chambers of Commerce (BCC) and Middlesex University shows

The survey of over 1,400 businesses found 23% of levy-paying firms had no understanding of how it worked or how their company would respond.

The government introduced the levy this year in an attempt to hit its target of creating 3 million apprenticeships by 2020.

Companies with a pay bill of £3m or more must pay the levy but can reclaim government vouchers for apprenticeships, whereas companies with a lesser pay bill do not have to pay it but can still claim apprentice funding.

Over half (56%) of levy-paying businesses do not expect to recover much of their payment while 36% believe they will recover all or more of it.

BCC businesses environment and skills head Jane Gratton said the government must ensure system changes did not affect the number of apprentices recruited or cause less investment in other forms of training.

“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”, she said.

Two-thirds of companies who qualified for apprentice funding were not using the funds available or were unaware of the scheme’s existence, the survey showed.

Federation of Small Businesses chairman Mike Cherry said businesses who did not pay the levy had little communication about the scheme compared to those who did.

“It’s critical that information on apprenticeship funding reaches small businesses if we are to increase social mobility and meet the government’s ambitious apprenticeships target,” he said.