The apprenticeship levy, which came into force yesterday, means all employers in England with pay bills greater than £3m – which includes all 32 London boroughs and the City of London – will be charged 0.5% of their annual pay bill.
This measure will affect approximately 2% of the nation’s employers who will be able to access this cash via the new Digital Apprenticeship Service, but will only be able to use the funds to create apprenticeships using approved providers.
The government has pledged to top up this funding by 10%.
Peter John, deputy chair of London Councils and executive member for business, skills and Brexit, said: “The best apprenticeships can offer life-changing career and training opportunities, especially to young people, but we have significant doubts over whether the apprenticeship levy in its current form can deliver an increase in apprenticeships.
“The levy lacks flexibility and doesn’t give employers the opportunity to use their funds to provide wider support for apprentices.
“While I’m pleased that the government is considering allowing levy funds to be transferred between employers from next year, the proposal to cap it at 10% is too small for those employers, like London boroughs, who have strong track records of generating apprenticeship starts in their supply chains.”
London Councils is concerned that funds raised in London will be reabsorbed by the government and spent elsewhere.
John called on the government to ring fence a share of the capital’s apprenticeship levy and devolve it to boroughs to help London firms increase apprenticeship starts, improve standards and build capacity with SMEs.
Criticism from London Councils follows earlier doubts raised by MPs who feared the flagship programme had a “worrying lack of focus”.
