Representatives of the staffing industry have been responding to Chancellor Phillip Hammond’s proposals for amending the Apprenticeship Levy after widespread condemnation of its original form from employment intermediaries supplying temporary/contracting staff.
At the time of the original announcement of the levy in November 2016, umbrella company trade association the Freelancer and Contractor Services Association (FCSA) produced research showing that 14% of intermediaries believed that their business would be jeopardised by the initiative.
FCSA CEO Julia Kermode condemned Government policymakers for not listening to the sector’s concerns. She said: “Intermediaries like umbrella companies and recruitment firms have artificially high payrolls and the Levy is one more cost to be borne, effectively another tax on a sector that has had more than its fair share of additional burden in recent years.”
Now the CEO of the UK and Ireland division of recruitment colossus Randstad, Mark Bull, has weighed in. He, too, had condemned the levy as an “unfair, ineffective and unjustifiable tax” in November 2016 – and he’s still not happy, despite Mr Hammond’s proposals.
The Chancellor plans to provide additional Government funding of £90 million to allow employers to invest a quarter of their apprenticeship monies in people working for firms in their supply chains. There will also be an extra £5 million for the Institute of Apprenticeships to develop new standards to promote higher-quality courses. Old frameworks will be discontinued so that new, higher standards will apply to all apprenticeships by the 2020-21 academic year.
Mr Bull believes these measures are insufficient. The levy is still charged on temporary intermediaries’ payroll but intermediary temps are still not able to access any levy-funded training. Mr Hammond’s amendments have failed to address this, he said, adding that it still prevents the very thing it was devised to grant access to.
He continued: “… it remains a payroll tax on agency temps, arguably a category of worker who would benefit, far more than most in many instances, from the kind of additional training it hopes to facilitate. It remains flawed, unfair, ineffective and an unjustifiable tax.”
However, the CEO of the Recruitment and Employment Confederation (REC), Neil Carberry, was rather more conciliatory, welcoming the attempt to make the levy more flexible, which he said will benefit many workers through better training opportunities. It will also help businesses who had been paying the levy but were unable to spend it.
He went on to say that the test of the Government’s pro-business mettle lay in the actions they will now take. He called on the Chancellor to suspend private sector IR35 reforms that would punish compliant businesses and prompt increased tax avoidance measures.