The Apprenticeship Levy: Time for a Tweak
Why the Rules Are Pushing Back the Next Generation of Workers
Every Thursday, 18‑year‑olds get their A‑Level results, but many of them are still feeling the jitters over where to start their careers. One thing that’s been holding them back and businesses alike is the rigid Apprenticeship Levy – a tax hook that’s making it harder to get apprentices on the job.
What the Levy was Really About
When the levy rolled out in 2017, the idea was simple: pay a little extra (0.5% of wages over £3 million) and then use those funds to train apprentices. However, the rules were a bit… bone‑hard. Stuff like these notes:
- No more than 20% of apprenticeship hours could be “off‑the‑job” training.
- Levy money disappeared if it wasn’t spent in two years.
- You could’t even use the fund for travel costs – a big knock‑on for young people who need to beat the traffic to get to work.
By 2022, the government was looking at a £3 billion waste of money that had expired in a blink. That’s not money Emma Oliver would want to be the teacher of; or rather, it’s a tax areal that could have been turned into skills rather than just another line item in the budget.
Why the Chill Should Be Affordably Friendly
Andrew Sanford – a partner at Blick Rothenberg – argues that the levy’s strict rules are not only a bureaucratic pain but actual training barriers for sectors that can’t afford to let young people off the clock too often. Retail and hospitality, in particular, are crying for a relaxation that will ease the pressure on hiring folks who might just be L5 in their folk of apprenticeship.
In plain language: If businesses are expected to keep the levy funds ticking over and not blowing through the limits, it shoots the cost of picking up new hard‑working teammates up right to the sky. Meanwhile, the increase in Employers National Insurance Contributions (NIC) and the push for a living wage mean that hiring even the cheapest apprentices is more expensive in reality than the headline pay looks.
Let’s Take the Wind Out of These Rules
By making the levy a bit more playful, we can:
- Ensure apprentices get real hands‑on experience that adds value to the company.
- Reduce the security fears for employers who are set up for the next year.
- Open up the door for younger folks who need more flexible training and transport arrangements.
In the end, a relaxed levy would lower the cost of onboarding fresh talent and help job‑seekers get a kick‑start in a notoriously tough market. It’s a win–win for the government (private sector and young workforce alike), and it could finally put a smile on 18‑year‑olds’ faces when they say, “Let’s get to work.”
