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CBI sets out four-point plan for new apprenticeship levy

The Confederation of British Industry (CBI) has set out its proposals for an ‘effective’ apprenticeship levy, despite initially being opposed to the new measure.

CBI Director-General Carolyn Fairbairn has written to Business Secretary Sajid Javid with a four-point plan for the levy, which was first announced in November’s Autumn Statement.

The new apprenticeship levy will come into effect from April 2017 and will be set at 0.5% of an employer’s paybill. It is a key measure intended to help meet Chancellor George Osborne’s target of creating three million apprentice starts by 2020.

In her letter to the Business Secretary, Ms Fairbairn called for a particular focus on SMEs and smaller levy payers, asking for a reduction in the system’s administrative burden.

She wrote: ‘The apprenticeship levy is a significant step. Its introduction is not an approach the CBI supported.

‘However if it is to be successful in providing the higher rates of training we all want to see, the levy system must ensure training is relevant and valuable for businesses and that it helps individuals build their careers.’

The four points set out by the CBI were:

· That the system must be ‘driven by economic and business need’

· That there should be flexibility in the system for different sectors and sizes of firm

· That the system should ‘fund quality and reward commitment’

· That there should be ‘relevant and simple apprenticeship standards across all parts of the UK’.

Every employer will receive a £15,000 allowance to offset against the apprenticeship levy, and the Government claims that 98% of all employers – and all businesses with salary costs of less than £3 million – will pay no levy at all.