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BESA welcomes Apprenticeship Levy distribution changes

Association argues that decision to allow funding to multiple organisations within a supply chain will improve apprentice uptake, especially for SMEs

BESA has welcomed government amendments to the Apprenticeship Levy that it has said will ease restrictions on the distribution of funds.

The organisation said that large companies that pay the levy will from this month be able to provide up to ten per cent of annual payments to multiple partners in its supply chain. This is a change from previous policy that restricted sharing of funding to one supply chain partner in order to support their training needs.

BESA training director Tony Howard said the organisation had been campaigning for the change since the launch of the levy last year.

He said, “Sharing the funding in this way will allow many more SMEs to invest in apprentices.”

The Apprenticeship Levy was introduced by the government last year with the aim of funding three million new roles by 2020.

According to BESA, only companies with annual payrolls of over £3m are required to pay into the levy. This is expected to create an estimated annual fund of £3bn that can be accessed by employers across the country for recruiting and training apprentices.

Confusion over how firms that do not pay the levy can access this funding was identified by the association as a key barrier needing to be addressed to meet ambitions to have an additional three million apprenticeships in place by 2020.

BESA cited Department for Education figures from earlier this year that found apprentice starts had fallen by 20 per cent since the levy’s launch, raising questions over the effectiveness of the system.

Mr Howard warned that perceived confusion over accessing levy funds was likely part of the reason for this fall.

He added, “The principal behind the Levy is sound, but small employers were struggling to access funds for specialist training provision – as opposed to the mainstream plumbing and electrical provision that was being offered to them by the further education sector. Also, many large companies were not using the full amount they paid in.”

“This decision is another step towards giving employers real flexibility because they will have the power of the fund to choose the provision they want. This should result in a steady rise in apprentice numbers over the next few years.”

The association said it would be pushing for funding to be directed to training providers that deliver New Standard apprenticeship courses, arguing that there was a “huge appetite” for taking on apprentices.

Mr Howard said, “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 new 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.”

Organisations such as the Confederation of British Industry (CBI) have previously called for the levy programme to be scrapped entirely. BESA has continued to back the programme as being on the “right track” however, albeit while calling for amendments on how funding is managed.

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