Commenting on the review of the Apprenticeship Levy, John Harding, Global Head of Employment Tax at PwC UK, says:
Today the Chancellor committed to review the Apprenticeship Levy in an attempt to tackle the UK’s perennial problem of sluggish productivity. His review comes as he acknowledged that the current tax system may not be doing enough to incentivise businesses to invest in the right kinds of training.
In PwC’s survey of 150 employers in August 2021, 41% of respondents said the Apprenticeship Levy had no impact on their investment in training and skills and 16% said it had hindered investment in skills. Today’s commitment to look again at the way Apprenticeship Levy funds can be spent is a chance for the Government to consult with businesses and develop a scheme that addresses businesses’ concerns.
Employers across various sectors have long called for flexibility in how funds can be spent. Our survey saw 60% of respondents wanting more control over the standards and it will be interesting to see what the Government will propose in the Autumn when further plans will be announced. However, the Government needs to ensure that apprenticeships remain a high-quality training route for people of all ages and stages of their careers.
It is also interesting to note that Sunak failed to announce any extra funding for schools to help cope with rising energy bills, amid soaring levels of inflation which now stands at 6.2%. Should the energy crisis deepen, the calls for help from school leaders will only grow louder.
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