The NFDA has backed calls for a delay to the imposition of the government’s proposed apprenticeship levy, citing “economic uncertainty” following the UK’s Brexit decision.
Employers from Britain’s largest manufacturing association, the EEF, joined with the CBI business lobby group, the Charity Finance Group and the Institute of Directors have all appealed for the levy to be postponed for at least a year.
The levy, due to come into force in April next year, was the brainchild of former chancellor George Osborne and was expected to raise the £3 billion a year needed to fund his aims of creating three million new apprenticeship roles by 2020.
But the application of the 0.5% levy to all businesses with a wage bill over £3 million is now being questioned and Sue Robinson, director of the NFDA, is backing calls for a delay.
She said: “The NFDA supports recent calls by businesses to the government to delay the apprenticeship levy.
“Following the decision to leave the EU and considering the short term economic uncertainty that the country is likely to face, many businesses are now in the process of adapting to the current situation.
“Although apprenticeships will positively benefit employers addressing skills shortages through targeted training, with the new levy coming into force in April 2017, businesses might struggle with this additional cost.
“The NFDA urges the government to delay the levy by at least one year to allow businesses to cope with changes and avoid unintended consequences such as job losses and pay cuts.”
In February this year a survey of automotive firms, developed by automotive industry consultants SMMT Industry Forum on behalf of the Automotive Industrial Partnership, revealed that a skills shortage in the automotive industry had left around 5,000 roles vacant.
It classified around 19% of the unfilled vacancies as “critical”, stating that their effect had significant impact on company operations.
Speaking at the time Jo Lopes, chair of the Automotive Industrial Partnership and head of technical excellence at Jaguar Land Rover, said that action needed to be taken to address the issue. He said: “These are very significant findings which present a valuable basis for government and industry to jointly tackle this issue head-on and ensure that the growth potential of the industry in the coming years is fulfilled.”