Apprenticeship Levy would have ‘a devastating impact’ says Build UK

Build UK says apprenticeships, like those run by the Forster Group, will face huge reductions in funding as a result of the Government’s proposed Apprenticeship Levy
Build UK says apprenticeships, like those run by the Forster Group, will face huge reductions in funding as a result of the Government’s proposed Apprenticeship Levy
Build UK says apprenticeships, like those run by the Forster Group, will face huge reductions in funding as a result of the Government’s proposed Apprenticeship Levy
Build UK says apprenticeships, like those run by the Forster Group, will face huge reductions in funding as a result of the Government’s proposed Apprenticeship Levy

Build UK has questioned the Government’s proposals for an Apprenticeship Levy, claiming that the introduction of the scheme as proposed would have ‘a devastating impact on training’ in the construction sector.

The majority of large employers in the construction sector currently pay towards a training levy operated by the Construction Industry Training Board (CITB), which receives £160m each year from just over 60,000 employers. Build UK says the Government’s Apprenticeship Levy could raise around £30 million per year from 212 large employers in construction.

However, the contracting body claims the majority of large employers would not be prepared to pay two levies and the introduction of a second levy would lead to a withdrawal of consensus for the CITB levy, costing the construction sector five times the amount being raised.

In its consultation response, Build UK states: “Individual employers currently in-scope to CITB would be left to source, fund, manage and deliver their own training and apprenticeships. The loss to employers would not just be financial support, but the wider infrastructure for apprenticeship delivery provided through the CITB managing agency and the work done in developing apprenticeship frameworks.

“As the majority of businesses within the construction sector are SMEs, this would have a devastating impact on the industry’s capability to recruit, train and retain a skilled workforce.”

Build UK has therefore proposed a series of conditions to the Government’s plans. It suggests that the new Apprenticeship Levy should be implemented without a significant increase in costs for large employers. This would be implemented by larger firms paying the proposed Levy, with their money to be channeled back to the CITB where it would be ring-fenced specifically for the delivery of apprenticeships. They would then pay the remainder of their CITB Levy contributions; all other employers would continue to pay the CITB Levy as before.

In its response, Build UK also suggests reforming the current CITB Levy and Grants Scheme to incentivise the recruitment, training and retention of apprentices ensuring long-term career development.

It also claims that it is essential that the number of high quality apprenticeships in construction is increased, which would contribute to the Government’s ambition to create three million apprenticeships by 2020. This would require schemes to deliver technical skills and knowledge needed by employers in the sector.

The organisation also claims the new Levy would have an immediate impact on apprenticeships available to 16-18 year olds, which is currently funded by Government. The new proposals would see a reduction in Government funding for the training element of apprenticeships across all age ranges, resulting in employers, both large and small, paying significantly more to employ an apprentice than at present. As this is likely to impact the number of apprenticeships being offered, Build UK is urging the Government to ensure all apprenticeship training for 16-18 year olds remains fully funded.

Build UK’s response follows consultation with 27 of the construction industry’s largest main Contractors and 40 trade associations representing over 11,500 specialist contractors. It claims discussions with Government will continue over the coming weeks, with further details on the Apprenticeship Levy due to be announced as part of the Spending Review in November.