Cameron announces procurement changes to boost apprenticeships

21 Aug 15

Prime Minister David Cameron has announced a change to public procurement rules that will require Whitehall departments to take offers of apprenticeships into account when awarding large government contracts.

The reform is one of a number of steps set out by government today to try to foster the creation of three million apprenticeships by 2020. Ministers have also launched a consultation on the implementation of the apprenticeship levy, first set out in the Summer Budget, which will be charged on large firms.

Cameron said the reforms are intended to ensure that all parts of the economy contribute to meeting the government’s apprenticeship target.

“The greatest asset any employer has is their workforce, and by investing in them, they are investing in the success and future of their business,” he stated.

“As a one-nation government, we are committed to supporting three million quality apprenticeships over the next five years – to help strengthen our economy, deliver the skills that employers need and give millions more hardworking people financial security and a brighter future.”

Under the procurement changes, to be applied from September, all bids for government contracts worth more than £10m will need to demonstrate a clear commitment to apprenticeships.

Central government departments, their executive agencies and non-departmental public bodies will then be required to assess these pledges alongside other relevant elements of the contract, including cost. The successful bidder will then have its agreed apprenticeship numbers written into the contract schedule.

Ministers also announced today that the apprenticeship levy is due to be introduced by April 2017.

Although the size and scope of the charge has not yet been set, today’s consultation set out proposals for how it would be collected and on what basis it might be calculated.

The government intends to set an employee headcount threshold beyond which firms will start to pay the levy, which will be collected by Revenue & Customs through an addition to the employers’ PAYE tax liabilities.

Skills minister Nick Boles said that for too long, UK businesses have invested too little in developing their employees’ skills to meet the demands of a global market.

“The apprenticeship levy will ensure that businesses invest in skills and training, and will act as a much needed shot in the arm for the country’s productivity,” he added.

The consultation on the levy will close on 2 October this year.

Responding to the announcements, Brian Lightman, general secretary of the Association of School and College Leaders, said he strongly supported the plans.

“We need to be doing everything we can to raise awareness about opportunities available and ensuring that young people have access to them throughout the country.

“The new levy has the potential to accelerate progress towards these aims. School and college leaders look forward to working with the government to ensure that it has maximum impact on the life chances of their students.”

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