The new apprenticeship levy could cut funding for construction apprenticeships by as much as 30%, the CITB has warned.
The CITB has raised concerns about changes to the apprenticeship levy and the introduction of new funding bands, stating the cut in funding could see training providers stop offering construction apprenticeships and instead opt for more costs-effective types of training.
Two weeks ago the government unveiled plans for the new apprenticeships levy that is set to come into force in 2017.
Under the new scheme, there will be a levy on larger businesses and training subsidies for smaller firms.
The proposed apprenticeship funding system will be made up of 15 bands, each with an upper limit ranging from £1,500 to £27,000. The upper limit of each funding band will cap the maximum amount of “digital funds” an employer who pays the levy can use towards an individual apprenticeship or that the government will co-invest.
All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands and it will be up to employers to negotiate prices with providers.
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%.
Steve Hearty, head of apprenticeships at CITB
However, according to Steve Hearty, head of apprenticeships at CITB, these funding bands raise real concerns for the construction industry and it has to be ensured they reflect the actual costs of training and facilitate contractors to keep taking on apprentices.
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.”
The need for clarification and greater urgency in introducing changes to the apprenticeships levy was stated by Tony Howard, director of training at the Building Engineering Services Association (BESA).
Speaking last week, he said: “We applaud the potential 90% government funding and the uplifting of STEM subject areas by 40% for level 2 apprentices and 80% for level 3 apprentices.”
“However, this is not approved yet and if we are to move successfully into the Trailblazers and Future Apprentices programmes we need that funding to be available now – not next year.
“If the government could accelerate the 90% funding to September, or even January, that would show real commitment to apprentice training and avoid employers delaying recruitment,” he added.
