Apprenticeship levy could be costly, reveals survey

Concerns have been raised over the new apprenticeship levy, with some businesses stating that it could be costly.

The latest CBI/Accenture Employment Trends Survey showed that job creation is on the up, but businesses are concerned about rising labour costs.

The survey, which was carried out between August and October 2015, showed that the number of jobs has continued to grow across the UK.

Costly

Details of the apprenticeship levy were released in a statement earlier this year. Chancellor George Osbourne announced that the levy will raise £3bn a year and will fund three million apprenticeships. Whilst 16% believe that the levy will help to tackle the UK’s skills challenges, 47% believe that it will be “costly and bureaucratic.”

The CBI commented that it was extra tax for companies and would have an effect on smaller businesses. However, only businesses with a wage bill of £3bn will be required to pay the levy. This means that over 90% of employers may be exempt from paying.

Danger

Carolyn Fairbairn, CBI Director-General, voiced her concerns, stating: “The UK’s labour market has continued to outperform expectations with businesses delivering jobs in every region of the UK. But there’s a danger of Government complacency, with companies facing multiple increasing costs, through the apprenticeship levy, the national living wage and unreformed business rates, these are acting as a cumulative drag that could hamper growth.”

She added that considering the concern surrounding effects of the National Minimum Wage, it is “critical an independent, evidence-based Low Pay Commission plays the main role in assessing its true impact and recommending future rate rises accordingly” and said that the government must be careful not to “sacrifice prosperity for political expediency by saddling businesses with costs that could harm investment, which is critical to increasing productivity.”