Apprenticeship levy after Brexit
At Thales, much has been discussed in the past around the state of future skills in the UK. Our colleagues over at Thales Learning & Development have been investigating the impact of Brexit on the Apprenticeship Levy and what this means for filling the engineering skills gap in the United Kingdom of tomorrow. For the full article and to read more of “Enhance” please visit Thales L&D.
Post-Brexit
So far life post-Brexit has changed relatively little; however with a new government now in place and a slew of promises being made as to what the future holds, it’s clear change is coming. Some things have already been impacted by the upheaval in government leadership; one that will affect the L&D sphere in particular is the resignation of skills minister Nick Boles, who had previously been spearheading the implementation of the apprenticeship levy. Without him at the helm, there is currently no one on hand to steer this particular ship, and already guidance that should have been released in July has been delayed due to the reshuffle. With concerns around how the levy would impact businesses present before the outcome of the referendum, it seems unlikely that the disruption that is currently on-going is likely to stem these.
Waiting patiently
Prior to the referendum vote large organisations in the UK were waiting patiently with baited breath to be provided with additional information on how the apprenticeship levy would work in practice. The relatively scant information that had been provided alerted businesses to the fact that for those organisations with a payroll bill of over £3 million, 0.5% will be taken for the levy, and will be designated as an apprenticeship allowance. While basic additional information on the practicalities of this is available on the government website, many businesses remained confused about how it would impact them and how the money would actually be used. There is even more confusion for the Scottish business world as there are no clear guidelines as to the amount of money that would be made available from the levy. Since the Brexit vote the Scottish government have decided to undertake consultation on the proposal to assess the impact the levy will have on local businesses. The release of further information about this was therefore highly anticipated, and the delay is likely to be a cause of frustration to many.
Agreed plans
The official line prior to the government restructure was that despite the Brexit outcome, the agreed plans for the levy would be going ahead and that businesses could expect further information in due course. This decision was in spite of cries from several experts campaigning for the deferral of the levy introduction until 2018; the Charity Finance Group was one of the biggest advocates of deferral. However the commitment to going ahead with the original plan was derailed by the resignation of Mr Boles. Alongside his resignation, and the rapid introduction of a new government, there are on-going concerns from financial experts about the potential for further economic downturn, and with many businesses worrying about the impact Brexit will have on their future trade, the apprenticeship levy may become a significant source of concern if the decision is made to push ahead. It remains unclear at this stage as to what the decision will be moving forward; there are risks on both sides of the argument, and it is likely that the newly appointed cabinet will elect to take time to review the potential impact of any decision.
On-going concern
Regardless of the outcome of the levy discussion, the need for apprentices remains an on-going concern for the UK economy, and may even become more significant as a result of the Brexit decision, as there will be fewer oversees workers filling roles, meaning greater demand for home grown talent. The current shortfall of talent in the UK is estimated to cost around £63million in the digital sector alone, and another £27million in construction. The need to close the skills gap in the UK is absolutely paramount to achieving a growing and sustainable economy, and apprentices are a key part of this. Therefore the decisions that are made regarding their future have arguably never been more important. As to what the next steps will be, we will just have to wait and see.