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Will the apprenticeship levy prove value for money?

PUBLISHED: 10:20 31 January 2017 | UPDATED: 15:50 31 January 2017

Palm Paper apprenticeships. Pictured is Jake Seekings. Picture: Ian Burt

Palm Paper apprenticeships. Pictured is Jake Seekings. Picture: Ian Burt

Fears have been raised the government’s imminent apprenticeship levy might not give value for money for businesses and may encourage firms to invest in the wrong skills.

Concerns were voiced after the Institute for Fiscal Studies released a report which warned most of the £2.8bn due to be raised in England by 2020 will not be spent on apprenticeships.

Mike Britch, managing director of the Norse Group, said the business was aiming to adapt its current apprenticeship schemes to fit the criteria of the apprenticeship levy.

He said: “We are definitely going to tailor our approach to suit the terms of the levy and to try to recover as much of the cost as we can to make sure it makes business sense.

“In terms of the bigger picture this is a very individual assessment for each business to make.”

Mr Britch added the group, which employs around 100 apprentices already, would most likely take on more as a result of the levy and was looking at way to include professional service roles such as accountants.

The report added there was a risk of apprenticeship simply becoming another word for training with government spending only expected to increase by £640m.

Neil Amin-Smith, the author of the report, said: “The new apprenticeship levy, and associated targets, risk repeating the mistakes of recent decades by encouraging employers and training providers to relabel current activity and seek subsidy rather than seek the best training.”

Chris Perry, chief executive of Future50 firm Swarm Apprenticeships, said he had concerns businesses would only consider apprenticeships for roles such as in engineering.

He said: “What is the danger is that many businesses will only look at bottom level roles.

“It is also an opportunity for them to get funded to upskill their existing staff.

“There is a danger, with the current focus on STEM subjects (science technology engineering and mathematics), that we will focus towards engineers when we also need to be training the leaders of the future.”

Suffolk Chamber of Commerce has campaigned and lobbied heavily in recent years in the area of skills and apprenticeships.

Ashleigh Seymour-Rutherford, lead for Young Chamber in Suffolk, said: “Suffolk Chamber of Commerce believes that good apprenticeship schemes benefit employers, young workers and the whole economy.

“However, there is a great deal of confusion around and our role is to work with our members and our education partners, including local schools, to demystify the process and ensure that only the best and most relevant apprenticeship schemes are supported.”

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