Manufacturers still worried about the impact of the Apprenticeship Levy

A new report has warned that the Apprenticeship Levy, set to be implemented next month, is regarded by many manufacturers as “a tax on their business”.

A little over a third of firms surveyed said they could not see the benefit of the scheme, which is expected to affect a greater number of employers than originally predicted.

Among the chief concerns within the industry are that firms won’t get back what they put in, the timescale for implementing the levy and uncertainty about whether the system is likely to evolve in future.

Those manufacturers who are more receptive to the idea were hopeful that the levy would increase the quality of the apprenticeships on offer, which could in turn persuade more young people to take on a placement.

The report on the industry’s attitudes was prepared by the EEF, the manufacturers’ organisation, and Lloyds Bank.

Terry Scuoler, the EEF’s chief executive, suggested the levy was still “a work in progress”.

“Despite much hard work and dialogue with government, we are on the cusp of a policy rollout that continues to cause manufacturers great concern,” he said.

“Clearly the Apprenticeship Levy has the potential to bring benefits, but not enough to outweigh our sector’s reservations. With skills such a high priority these fears are entirely understandable and must be swiftly addressed.”

Dave Atkinson, the UK head of manufacturing at Lloyds Bank Commercial Banking, said: “It’s important that the Apprenticeship Levy builds on this by supporting manufacturers’ training ambitions and acting as an enabler so that many more feel able to offer these valuable and aspirational roles.”

The levy – which will be charged at 0.5 per cent on any pay bills exceeding £3million – was announced in 2015 and will be used to fund new apprenticeships.

The Government has said that the measure will increase vocational skills and has argued that less than two per cent of all employers will have to pay.

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