Summer Budget 2015: Apprenticeship levy so firms “get back more than they put in”

Summer Budget 2015: A 500-word summary for the UK business community

“While many firms do a brilliant job training their workforces; there are too many large companies who leave the training to others and take a free ride on the system,” he said.

Aimed at larger businesses, chancellor George Osborne’s the decision is a “radical, and frankly long overdue, approach”.

Since the Conservatives came into power alongside the Liberal Democrats in 2010, some two million apprenticeships have been created. Now it is a majority government, the Conservatives have set out plans to create a further three million by 2020.

Osborne declared that those going about apprenticeship training in the right way will “get more back than they put in”. He also believes it is the “bold step” needed to be taken if Britain is going to “raise its game”.

Read more from our summer Budget commentary:

• George Osborne says tax dodgers have “nowhere to hide”
• George Osborne adds more detail to Northern Powerhouse plans
• Compulsory national living wage gets mixed reception
• George Osborne permanently fixes Annual Investment Allowance at £200,000
• Cut in corporation tax welcomed by British businesses
• Apprenticeship levy so firms “get back more than they put in”
• Roads Fund introduced as part of the plan to boost productivity

The chancellor wants to, though the legislation, tackle those who he thinks are taking a “free ride” by taking advantage of the incentives on offer to employ apprentices.

The levy is expected will see every employer paying in, with training subsidised by the funds. The employer of the apprentice will determine where training makes place (from approved institutions).

Read more about apprenticeships:

• The PwC approach to apprenticeships and training
• Apprenticeships not a corporate social responsibility, but at heart of business
• David Cameron unveils nine new degree apprenticeships

David Cameron’s government has committed to produce three million apprenticeships by 2020, and has diversified the offering by implementing higher-level programmes, recruiting Trailblazer companies to administer them and raising the minimum wage offered to apprentices.

In the last Budget, in March, it was announced that apprentices will see a 20 per cent pay rise. Speaking then, Osborne said: “It’s the oldest rule of economic policy. It’s the lowest paid who suffer most when the economy fails and it’s the lowest paid who benefit when you turn that economy around.”

Going forward, funds involved with the training of apprenticeships will be controlled by employers – though a system yet to be determined. Outlined as a “radical and long overdue approach” to the system of apprenticeships, Osborne is putting power into the hands of businesses which manage the training process correctly.

By Hunter Ruthven

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