Government’s new levy could hit funding for apprentices by up to 30%

The government’s new apprenticeship levy could cut funding for construction apprenticeships by up to 30%, the CITB has warned.

The training body said the levy’s proposed funding bands would see funding for construction apprenticeships cut by 20-30%, and could put training providers off offering construction training.

Contractors could also be dissuaded from taking on apprentices if they have to make up any gap in funding, the CITB warned in a statement.

As part of the levy plans, new standards will be introduced for apprenticeship types with funding capped across sectors.

But while standards for some sectors have been approved by employer-led groups, no construction standards have been approved - a process the CITB said could take up to 18 months, meaning providers will have to use the existing framework, which is due to have its funding cut in April next year.

Firms will have to begin paying the levy from 6 April next year and will be able to start claiming funding from the following month.

In a statement, the CITB’s head of apprenticeships, Steve Hearty, warned the proposed funding bands “raise real concerns for the construction industry.”

He said: “We support the new, employer-designed standards, because we think they will improve the quality of apprenticeships, and it is encouraging to note that Government state these will be funded at a higher rate than those recently published.

“However, no standards for construction have yet been approved and we are still working under the existing frameworks system and may well continue beyond 2017.

“Even with the sector beneficial STEM increases to funding the Government’s proposed funding bands will cut funding for construction apprenticeships by between 20% and 30%.

“We are concerned that training providers could stop training or they could ask employers to make up the shortfall in cost, which might deter firms from taking apprentices on.

“We have shared our concerns with [the Department for Education] and will be doing formally through the formal consultation process that closes on 5 September. Employers can do the same.”

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