The Building Engineering Services Association (BESA) has welcomed an unexpected improvement to the Apprenticeship Levy announced by the Chancellor of the Exchequer.
Speaking at this week’s Conservative Party Conference, Philip Hammond announced a £125 million funding package that will allow large employers to transfer up to 25 per cent of their Levy funds to smaller supply chain partners from next April. This is a significant step up from the 10 per cent, which started this July.
During his speech to the conference in Birmingham, the Chancellor also announced the government’s intention to increase the number of people who can access science and technology courses and said it would spend up to £30 million on encouraging big business to mentor small firms.
Only around two per cent of employers actually pay into the Levy – those with annual payrolls of £3 million and above – but the estimated annual pot of £3 billion is intended to be used by all employers to subsidise apprentice recruitment and training. However, there had been considerable confusion about how non-levy paying firms could gain access to the money.
Director of BESA Training Tony Howard, commented: “There continues to be a perception of the Levy as some sort of additional tax on large employers, but they are able to claim back all of the money through their own training.
“Thanks to this new move by the Chancellor, up to 25 per cent of what they pay can also be used to help firms in their supply chains carry out the training they need to improve and grow, which will also benefit the levy-payer’s business. It is just the kind of pro-business measure employers have been crying out for in the build up to Brexit.”
By sharing their levy funds, larger firms can support companies who may not have considered hiring an apprentice before or could not get the specialist provision they wanted. However, BESA also pointed out that funding needed to be directed towards training providers capable of delivering the new type of apprenticeship courses, which have been developed “by employers for employers”.
Howard added: “There is huge appetite out there to take on apprentices. At BESA Training, we have seen a record number of enquiries from companies of all sizes wanting apprentices. We have also seen a 27 per cent increase in apprentices signing up for our New Standard courses.
“The difficulty for building services employers has been finding providers in their area able to deliver the training. Many specialist courses were closed years ago because of a drop in demand after the financial crash or because providers cherry picked the apprenticeships that they wanted to deliver.
“However, this new stream of funding brings fresh hope – and the fact it has been increased from 10 per cent to 25 per cent shows that the government understands the principle behind this.”