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Manufacturers’ frustrations from the Apprenticeship Levy don’t just stem from the fact that the Levy is a tax. It is the fact that manufacturers, who offer gold-standard apprenticeships and are true champions of apprenticeships, wanted the Levy to deliver added value. As an industry, we wanted the Levy to secure long-term gains of creating more quality apprenticeships and deliver the skills the industry so desperately needs.

But one year on and the Government’s own statistics shows not all is well. EEF’s report – A Levy Price to Pay? explores the impact that the Apprenticeship Levy has had on manufacturers.

It finds that manufacturers have not been able to afford to stop training apprentices as they are vital to their business, but that the Levy itself hasn’t spurred on further investment in, or recruitment of, apprentices. In fact, in some cases plans to offer apprenticeships have been scaled back. It finds that just 7% of manufacturers have faced no challenges with the Levy. With the majority facing challenges in finding quality providers, relevant standards and meeting the various funding rule requirements. It is not a surprise then that manufacturers want to see change.

With just 5% of manufacturers saying they want to keep the Levy as it is, there is clearly a case for change. The majority want to see improvements made to the Levy. But they want to see it now. Our report outlines the immediate changes the Government must take to get the Levy back on track.

Whilst the Apprentice Levy had laudable aims, its impact has been highly damaging for employers and apprentices, and what should have been a win-win situation has turned into a lose-lose.

We have to address the alarming drop in starts initially and then look at positive solutions which are on the table to make the Levy work for employers and learners in the long term. Government must now sit down with business and find a way to rescue the Levy so that it meets the original pledges made to companies when it was introduced.

Verity O'Keefe Senior Employment and Skills Policy Adviser

Available resources

Grants and funding / Industry report