Professional bodies representing the staffing industry and employment intermediaries such as Umbrella Companies have been dealt an apparent blow by a Government statement from the Department of Education, which insists that there are no plans to make changes to the Apprenticeship Levy.
The Levy, which was introduced in April, met with widespread criticism from recruitment and Umbrella Company trade associations, notably the Association of Recruitment Consultancies (ARC) and the Freelancer and Contractor Services Association (FCSA), for the disproportionate financial impact that it will have on intermediaries, whose “staff” payrolls are artificially high due to the large number of temporary workers and contracting professionals that they have on their books.
According to the September edition of Recruiter magazine, the Levy is costing recruiters and Umbrella Companies millions of pounds a year. All intermediaries with wage bills in excess of £3m annually are subject to the Levy at a rate of 0.5 per cent of that yearly amount, despite the fact that for most of them, the actual in-house staff wage bill is far, far less.
Not only are intermediaries being severely and unfairly hit by the Levy, but the temp workers and contractors engaged through them are also missing out on its benefits. The Levy, which is designed to finance apprenticeships of at least 12 months’ duration, wholly misses the needs of these workers for training and upskilling.
Hopes had been rising that the Government would reconsider the effects of the Levy on intermediaries. ARC Chairman Adrian Marlowe recently informed Recruiter that he’d received indications from Government officials at the start of the year that a review was likely to take place this autumn. The ARC has been doggedly campaigning for the Levy to be made more sector worker- and temp worker-“friendly.”
Despite this, the battle for fairness appears far from over. The Recruitment and Employment Confederation’s Director of Policy and Professional Services, Tom Hadley, told Recruiter that efforts to change the Government’s stance will persist. There is, he said, growing recognition that people who work in “non-traditional” ways also have training needs that require attention.
Meanwhile, the ARC’s Communications Director, John Randall, told Recruiter that his organisation is “disappointed” that the Government has apparently failed to recognise the value of the flexible workforce at this stage. Current policy clearly locks these workers out from access to upskilling and training.
He went on to say: “The UK needs a skilled and flexible workforce, yet one area of the workforce is being denied access to the Apprenticeship Levy and the skills they need, something that will be even more important post-Brexit.”