IoBM supports BMF position on Apprenticeship Levy

Published:  16 March, 2016

The Institute of Builders Merchants (IOBM) has endorsed the Builders' Merchants Federation's (BMF) view that firms unwilling to take on apprentices will lose out when the government's new Apprenticeship Levy comes into effect in April.

The scheme will reinvest 0.5% of staff spending into apprenticeships via PAYE for all companies with a payroll of more than £3m. A recent BMF survey found 92% of merchants required to pay the levy have no plans to take on additional apprentices, meaning they'll see no return on their contribution.

The policy is central to the government's push to create 3m new apprenticeships by 2020. The apprenticeships will be funded through training credits or vouchers, to use on government-approved training courses with an additional £15,000 allowance provided to spend on extra training.

The same survey found the industry is still divided over apprentices, with approximately half (51%) of firms currently employing at least one apprentice, meaning 49% have none on the books. The average BMF member employs 14 apprentices a year and the sector is expected to take on 1,000 more in the next two years.

Allan Durning, president of IOBM, said: "We wholeheartedly share the concern of the BMF that the overall effect of the new apprenticeship levy will be negative if firms in the industry are unwilling to bring on additional apprentices.

"Apprenticeships are a fantastic way to blood new talent and remain a great option for employers. It's important those that are required to contribute reap the rewards of the scheme and this can only be achieved by recruiting apprentices.

"This scheme must be viewed as an incentive to create new apprenticeships and not just an additional employment tax imposed by the government. The research carried out by the BMF provides enough grounds for concern that this is not the case. We must see a change in mind-set before our industry misses out and the money is spent elsewhere."

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