Apprenticeship Levy – interference or government support?

For years the government has tried to convince employers to invest in the skills of the workforce. There is clear evidence showing that training benefits the individual, the State, but also the employer. People become more productive, and actually, they often feel more wedded to the employer who is investing in them. The idea of training people just to see them leave might be correct in some instances, but overall the effect isn’t as obvious as the scare stories suggest. Rather, there are far more benefits of training your staff than there are costs.

But the government has seemingly parked the persuasion approach and is set to replace it with a payroll tax, meaning that employers with an annual bill of over £3M will pay the Apprenticeship Levy.

Estimates are that this means that approximately 530 companies in the transport and storage sector will, between them, be paying something like £65M a year.

Smaller employers will receive funding support amounting to 90% of the costs of training, with even more being available for employers who train and then take on young people.

Likewise, we should note that the new Trailblazer apprenticeship in LGV Driver, with new funding levels which seem more in keeping with the true cost of training a driver, will be a key part of the new system.

On one hand, I don’t like the idea of a payroll levy. Employers surely know themselves where best to spend their money and something about government interfering in business doesn’t sit right with me. However, I do believe that skills and training our people is becoming even more important in protecting the UK’s Logistics Sector, and there does seem to be significant support for smaller and micro businesses in the new package.

As ever, the real trick will be in understanding the funding system and sourcing a high quality training provider. Not all provision is the same, and high quality training providers really look key to making this new approach work.

David Coombes, Founder and Managing Director of Logistics Job Shop