As the UK’s new Apprenticeship Levy came into force last week, Suzanne Horne, Head of the International Employment Law Practice at Paul Hastings, reveals to Lawyer Monthly she is sceptical that firms will have the motivation to overcome the bureaucratic and cultural hurdles required to make new apprentices a staple of the white-collar workforce in the UK.
New, world-class apprenticeship standards across 29 industries led by 1,200 trailblazing employers is a great sound bite. But, if the Apprenticeship Levy is to succeed in making apprenticeships a feature of the modern workplace, employers and society alike will need to be open to embrace a cultural change, as this legislation challenges traditional perceptions of where apprenticeships are appropriate and where they are not.
Only time will tell if employers can find a way to make the scheme work for them. However, with the prospect of a subsidy for small companies through a co-investment model, and the appetite of larger firms to claw back the costs of the levy, firms may find the motivation to tackle the bureaucratic and cultural hurdles required to make the new apprentices a staple of the white-collar workforce in the UK.
That said, the levy is not without its faults. Some devolved nation MPs have referred to it as a ‘UK Government employment tax’. UK employers with a cross-border workforce will need to manage the different administrative arrangements for funding for each devolved nation. Some industries that are reliant on apprentices, such as construction, engineering and film, already pay a levy and are now facing the prospect of paying a second cost on top. What’s more, larger employers are effectively subsidising government policy. Each large employer with an annual payroll bill of over £3m pays the 0.5% levy, but only one will be entitled access to the £15,000 allowance. For these companies, it will be hard to view the levy as anything more than an additional tax on their payroll.
