Is the industry ready for the apprenticeship levy?

The government’s apprenticeship levy will come into force in April 2017. This means in just four months, companies with a payroll of £3m or more will be paying 0.5% of that cost into a pot, which UK businesses will be able to draw from for staff training.

The tax was announced in the 2015 Summer Budget, but the RHA has speculated that affected businesses are underprepared for the extra cost or, in some cases, unaware of the tax altogether.

The association’s director of policy for employment and skills Colin Snape, who led the industry’s battle for a government funded HGV driver training apprenticeship, said: “It has become clear that while most firms know that there are new industry apprenticeships, many are unaware that at the same time they are going to be taxed.

“While the levy is unwelcome, the RHA is working to ensure the industry takes full advantage of what should be an important new opportunity for firms of all sizes to take better control of the recruitment and training of staff,” he added.

David Lelue, recruitment manager at CM Downton, echoed Snape’s view that some operators are underprepared for the cost.

He told Motortransport.co.uk: “Some people aren’t very prepared for it.

“But also I think some companies are going to write the cost of the levy off, because it’s not worth their time. Smaller companies will use that money, but bigger companies might not want the funding for it, if they outsource their transport, so they write it off.”

However Lelue said that CM Downton is already gearing up for the new tax, and has been having regular meetings with its training providers to stay in the loop about the forthcoming changes.

He said: “They’ve been in for several meetings in recent months. We’ve not signed anything off, but there’s nothing wrong with preparing and getting infrastructure in place.”

Lelue added that the levy will allow Downton to spend its money on existing employees instead of pouring all of its training capital into new blood.

He said: “The funding we’re paying into the levy, we can use it for our existing employees too, to upskill them. We’re going to use all the money.

“It won’t cost more than what we’re already spending – we invest heavily in training anyway - but it will definitely help. We’ll be able to do a lot more with the funds we get through.”

The FTA is also gearing up for the levy to hit the industry, having written to the Welsh, Scottish and Northern Irish administrations asking for “clear plans” to be in place across the UK before next April.

The association’s skills policy development manager Sally Gilson said: “The devolved governments must ensure that those businesses who operate across borders can make use of their levy funds geographically wherever is best suited.

“It is important that the apprenticeship levy does not become another business tax and that levy payers have access to suitable, fully funded-apprenticeships for all age groups.”

In County Durham, Elddis Transport is engaging with its training providers ahead of the new tax.

MD Nigel Cook told Motortransport.co.uk: “We are aware of the levy and have a meeting scheduled beginning of January with our training provider to better understand how we utilise funds from the levy to bring new staff into the industry and develop existing employees.”

Postal operators Hermes and Whistl also said they are preparing for the levy to hit.

Wendy Davis, head of resourcing at Hermes, said: “We are fully aware of the levy and we are planning to focus on developing the skills of our current people, as well as any new employees.

“We are currently exploring how we can bring in the trailblazer apprenticeships to work alongside our current in-house driving academy. We are also looking forward to hearing more about potential apprenticeships for driver assessors."

At Whistl, HR director Lynn Dillon said the company has been “proactively planning” for the tax.

She said: “We have been pro-actively planning how we manage the impact of the cost and make best use of the opportunity presented around Apprenticeships and the new approach.

We have created a proposal for Phase 1 which will take us through most of 2017 and as further clarification is received around what apprenticeship schemes become available we will continue to work with our chosen training supplier to constantly re-assess the situation.”

Dillon added that Whistl was looking at whether it would make use of the HGV driver training trailblazer, and that it would “make final decisions early in 2017 as to whether we will participate but we are eager to look at scheme’s such as this for both our existing and new driver population”.