TRADERS are in for a shock, as changes to apprenticeships kick-in, experts have warned.
The boss of one of the country’s biggest training providers says many do not realise the government’s new Apprenticeship Levy applies to them.
Debbie Gardiner, chief executive of Qube Learning which oversees 3,500 apprentices, says there is confusion around the changes.
Ms Gardiner, whose £12m-turnover Milton Park-based firm was recently visited by Wantage MP Ed Vaizey, said: “I have spoken to a lot of smaller employers and it’s the first time they have realised it affects them.”
Under the new scheme, which starts today, firms and charities with an annual wage bill of more than £3m must pay a levy of 0.5 per cent.
The cash will be ring-fenced to pay for apprenticeship training and boosted by 10 per cent government top-ups.
Firms with wage bills under £3m will have 90 per cent of apprenticeship training costs covered but will have to stump-up the remaining 10 per cent themselves.
Ms Gardiner added: “Big firms may be a bit aggrieved at having to pay a levy because they have no choice but small employers do have a choice – they don’t have to take on an apprentice.
“I am concerned micro businesses won’t be able to participate anymore.”
Oxfordshire Apprentices founder and head of training provider Maverish Paddy Patterson is also concerned.
He said: “We have had two years to prepare for this, yet as it goes live, many businesses don’t know anything about it.”
“A lot are saying ‘It doesn’t affect us because we don’t take on apprentices’ but it does affect them, regardless.
“My fear is lots of businesses will be thrown into financial chaos because they haven’t planned for it.”
Electrical contractors Clarkson Evans employs more than 200 apprentices and the new Levy will cost it £85,000 a year.
HR and training director Lyndsey Young said “It means a shift in the way apprenticeship funding is handled.
“There’s so much benefit of taking on apprentices and seeing them come through the business, we would do it anyway.
“It’s more of a distraction than a game-changer.”
But she added: “It does mean we have to spend time updating our systems and understanding the way the funding works.”
Although the new Apprenticeship Levy will cost Oxford University a whopping £2.8m a year, apprenticeship manager Clive Shepherd has welcomed it.
With 100 apprentices, he expects that number to double by this time next year.
He said: It’s going to make a huge difference. There’s a whole raft of exciting opportunities opened up.”