Leading national charities have urged the government to reform the apprenticeship levy so that funds raised from voluntary organisations are spent within the sector.
In March 2016, former skills minister Nick Boles told Charity Finance Group (CFG) that employers, including charities, would be able to transfer their levy funds to other employers.
While the CFG said this was not a “perfect solution”, it would allow charities to transfer unspent funds within the sector.
But yesterday, the government published guidance confirming it will be limiting the amount that employers can transfer via the levy, due to be introduced next month, to 10 per cent.
“From April 2018, we plan to allow levy-paying employers to transfer funds to another employer or apprenticeship training agency through the apprenticeship service,” it says.
“You will initially be able to transfer up to 10 per cent of the annual value of funds entering your apprenticeship service account.”
It adds that more information about how transferring funds between organisations will work in practice will be published in the autumn.
In response, CFG and 23 voluntary organisations including Marie Curie, British Heart Foundation and National Trust, wrote to education secretary Justine Greening renewing a call for this limit to be increased to 100 per cent for charities.
Caron Bradshaw, CFG chief executive, said: “Charities want to ensure that they are supporting their employees to develop, and with Brexit on the horizon it is more important than ever that they are able to increase skills in their workforce. However, as it currently stands, the apprenticeship levy will prohibit charities from doing this.
“We now are less than a month away before the levy is introduced and it is vital that the government acts now and reforms the levy before it is too late.
“To not do so will risk undermining our sector’s ability to support the people and communities that rely on charities, at a time when they are being asked to do more.”
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Public support
Polling of more than 2,000 British adults in February, commissioned by CFG and carried out by ComRes, found just 14 per cent of respondents believe charities should pay the apprenticeship levy at all compared to 58 per cent who believe private companies should be subject to the levy, and 44 per cent who believe public sector organisations should pay.
Some 46 per cent of respondents said that unused apprenticeship levy funds from charities should not be transferred out of the sector.
The apprenticeship levy forces employers with a payroll of more than £3m to pay 0.3 per cent of their total wage bill to the government.
In turn, the government provides £15,000 to the employer to offset the cost of implementing the scheme. The difference in the amount that is paid out by the charity and received from the government will be put into an account for employers to put towards apprenticeship schemes.
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