Tony Howard, BESA's director of training.
Speaking at this week’s Conservative Party Conference, Philip Hammond announced a £125m funding package that will allow large employers to transfer up to 25 percent of their Levy funds to smaller supply chain partners from next April. This is a significant step up from the 10 percent, 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 £30m on encouraging big business to mentor small firms.
“This is huge,” said director of BESA Training Tony Howard. “Particularly as much of the talk before the Conference was about the Conservative Party wanting to water down the Levy in a bid to pacify big business.”
Only around two percent of employers actually pay into the Levy – those with annual payrolls of £3m and above – but the estimated annual pot of £3bn 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.
“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,” said Mr Howard.
“Thanks to this new move by the Chancellor, up to 25 percent 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”.
“There is huge appetite out there to take on apprentices,” said Mr Howard. “At BESA Training, we have seen a record number of enquiries from companies of all sizes wanting apprentices. We have also seen a 27 percent increase in apprentices signing up for our New Standard courses.
He added: “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 percent to 25 percent shows that the government understands the principle behind this.”