Large and small businesses should receive the same level of government subsidy for apprenticeship training, according to the Institute for Fiscal Studies.
Experts at the economic research organisations have also warned that Labour’s plan to reform the apprenticeship levy so that it funds other types of training risks creating “significant deadweight costs”, in a new report published today.
The apprenticeship levy, introduced in 2017, subsidises apprenticeship training costs. Firms that pay the levy – those with an annual pay bill of more than £3 million – get a larger subsidy rate of 110 per cent. Non-levy payers meanwhile get 95 per cent of apprenticeship costs covered.
Handing larger firms a large subsidy could risk companies using apprenticeships because they are funded, even if their needs are better suited to other training schemes.
