The Chartered Insurance Institute has warned members that the planned 2017 government apprenticeship levy will be imposed upon larger firms, meaning higher training costs on advisory firms.
The CII anticipates that the levy will be calculated at 0.5 per cent of a firm’s payroll and will be announced as part of the government’s spending review on 25 November.
In a statement, the CII said the levy would need to be significantly lower to be affordable. If set too high, firms will not be able to deliver the significant amount of training necessary to get more apprenticeship funding back than they put in. This would risk less money being available for firms to invest in other forms of training and a reduction in apprenticeship opportunities.
The industry body said in England, firms’ levies can be used to drawdown for apprenticeships. It encouraged members to use apprenticeships across the business, including technical disciplines, legal functions, IT and customer service.
Dr Sandy Scott, chief executive of the CII, said: “Businesses need to be reassured that a levy is not just a new tax, so all funds must be ring-fenced and protected. We must ensure this does not become a box-ticking exercise aimed at simply boosting numbers without any real thought for the quality of experience for apprentices and firms.”
According to the CII, apprenticeships are particularly needed in the finanial advice sector.
The CII move comes as the business, innovation & skills and education committees concluded that plans to encourage employers to provide job-related training should focus on apprentice training.
In a 33-page report: Education, Skills and Productivity: Commissioned Research, the committees found that investment in skills development played an important part in fostering productivity growth.
The report said this was vital, as average labour productivity was a third lower in the UK in 2014 than in the US, France and Germany combined. It also said 40 per cent of graduates in the UK believed they had the skills necessary to carry out the duties given in their jobs.
| Key facts |
The government plans to create 3 million new apprenticeships by 2020 Levy could be 0.5 per cent of an IFA firm’s payroll 40% of UK graduates feel they have the skills needed for the demands of the jobs Source: BIS/CII |
Adviser view
Darren Cooke, chartered financial planner for Derby-based Red Circle Financial Planning, said he felt there was a skills shortage in the financial services industry. Mr Cooke said: “There is a rumour going around that now is the right time to get the most money that an adviser will ever get for their business. I know someone in his 40s who has had enough of the industry, and wants to sell his practice, but carry on working for someone else.”
