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Report raises apprenticeship levy concerns

Apprentice

A report warning the apprenticeship levy could lower workers’ wages has “reinforced concerns” for a leading engineering body.

A chapter from the Institute for Fiscal Studies’ (IFS) forthcoming IFS Green Budget 2017 claims that the levy – starting from April – will reduce wages by 0.3% by 2020–21.

It also suggests that rapid expansion of the apprenticeship programme to 3M new apprenticeships from 2015 to 2020 could lead to compromises on quality.

The Civil Engineering Contractors Association (CECA) said it worried about the issues raised in the report.

“CECA has highlighted its concerns about the apprenticeship levy for more than a year now, as we fear its introduction runs the risk of increasing costs to industry while failing to deliver the anticipated growth in apprentice numbers,” said CECA head of external affairs Marie-Claude Hemming.

“The IFS study reinforces this concern. Given the limited time before the levy is introduced, we see a role now to monitor how it is impacting industry, and will be working with government to mitigate any challenges to the sector before they negatively influence the work of members.”

However, the Institution of Engineering and Technology (IET) was positive about the government’s focus on apprenticeships.

“The government’s increased focus on apprenticeships is welcomed. Apprenticeships are backed by a large number of employers already but the concerns raised by the IFS highlight that we must work more collaboratively to ensure that the quality of apprenticeship training and delivery is maintained,” said IET education and skills panel chair John Perkins.

“The apprenticeship levy, and new degree apprenticeships, provide an opportunity for organisations to think innovatively about developing the higher level skills that the UK urgently needs.”

The Department for Education (DfE) defended the apprenticeship levy and its expansion programme.

“Quality is at the heart of all of our apprenticeship reforms. We have introduced new apprenticeship standards which are developed by employers themselves and rigorously checked and taken steps to protect the term apprenticeship from misuse helping us to achieve our target of 3M apprenticeship starts by 2020 and providing excellent value for money,” said a DfE spokesperson.

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