More rounds of consultation await the industry before there is clarity on how the Richard Review proposals for “employer ownership” of funding for apprentices will affect construction companies.
A consultation on three proposed methods of redirecting government cash for apprentice training to employers concluded on 1 October 1 – see our report here.
The situation was updated in last week’s autumn statement, which announced that “the government will develop a model which uses HMRC systems to route apprenticeship funding direct to employers and consult on the technical details of the system in early 2014, and on the option of an alternative funding route for the smallest businesses”.
Many industry organisations, including most members of the Cross-Industry Construction Apprenticeship Task Force, opposed the consultation plan as burdensome for SME employers and a deterrent to training apprentices.
The intention is that employers would pay upfront for their apprentices’ training at a college or training provider then claim the money back from government via the PAYE system.
Sarah McMonagle, policy and public affairs manager at the Federation of Master Builders, said: “There will be another consultation early next year, which might set out some alternative methods of funding for smaller companies. It sounds like we are going to have a question mark over this for some time yet.”
The FMB says that it and other members of the CCATF will continue to lobby to ensure no additional upfront costs or administrative burdens are placed on construction SMEs.
But the UK Commission for Employment and Skills, which supported the switch to tax system funding, welcomes the government’s plans as “putting employers in the driving seat”.
It has published a leaflet detailing what it sees as the advantages of a PAYE-linked scheme, including the fact that it would help link apprentices to other aspects of business planning, and could incentivise employers to make sure the apprentice completes their course.
It says the system would involve the following steps:
- Employer decides to recruit an apprentice
- Employer chooses a training provider and agrees a price for training
- Employer registers the apprentice online and provides information about their age and apprenticeship level as well as employer PAYE information
- HMRC are automatically notified that the employer can recover some of its costs through reducing National Insurance contributions
- Employer logs online when the apprenticeship is complete and a percentage of the total cost is released as a final tax offset
- Employer National Insurance payments revert to normal
