Fairburn calls for levy rethink

Director-general Carolyn Fairbairn will warn the policy could have “unintended consequences” unless changes are made.

The Government wants to raise £3 billion to fund apprenticeships by charging a 0.5 per cent levy on companies with a payroll bigger than £3 million.

In a speech in London, Ms Fairbairn will say: “Firms across the UK are emphatic that tackling skills shortages is the only way to succeed and create prosperity. They want to create quality apprenticeships and they’re ready to work with the Government to do this.

“But as it stands that’s not what the levy is doing. We need to change that, which is why we are calling for a ‘radical rethink’.”

Ms Fairbairn will warn that companies are faced with changing current successful training programmes just so they meet the description of “apprenticeships”.

And she will express concern that the Government will only measure the number of apprenticeships that are started rather than the number of qualified apprentices which emerge.

Ms Fairbairn will say: “As a nation, what outcome are we trying to achieve on skills? The Government has set out a target to create three million apprenticeships by 2020 and it deserves credit for its level of ambition.

“Business shares this goal to raise numbers - yet - despite the Government’s good intentions - the target could have unintended consequences.”

She will also call for clarity over the rebate mechanism for firms with good schemes.