Make Apprenticeship Levy more ‘contractor-friendly’ post-2020, says REC

A call to the chancellor to make the Apprenticeship Levy more ‘contractor-friendly’ has been echoed by an agency staffing group.

The Recruitment & Employment Confederation says it now has formalised a “similar” stance to IPSE, which appealed to Philip Hammond last year, by launching a petition.

Mindful that the government used Budget 2018 to say a review of the Apprenticeship Levy post-2020 would be a welcome chance to reset and reshape the AL, the REC’s petition states:

“Apprenticeships are a great way to learn and find opportunities for progression.

“But with fewer people working traditional 9-to-5 jobs, the apprenticeships model doesn’t provide training opportunities to temporary workers whose contracts are nearly always less than 12 months.”

'One million temps excluded'

In line with the claim, 2017/18 figures show that only two per cent of temporary roles exceeded the 12-month threshold set by the government’s rules, meaning 98% of such non-permanent workers were ineligible for apprenticeships.

Put another way, almost one million temporary workers contracting via REC member firms were last year automatically excluded from taking up apprenticeships.

As well as the strict criteria on apprenticeship duration, an inflexible ‘off the job training’  requirement and “restrictive,” “complex” transfer of funds rules, make the AL a non-starter for the temporary staffing sector, the REC adds.

'IT contractors could definitely benefit'

A spokesman for the confederation told ContractorUK: “We’d like the Apprenticeship Levy to be broadened so that recruitment agencies can spend their levy funds on training courses for their temp or contractor workforce.

“[The effect will be] that workers on all kinds of [non-permanent] contracts can benefit from AL-funded training. That includes contractors, [so] our stance is that contractors definitely could benefit from this kind of reform, including those in the IT sector.”

The online petition, and an accompanying report, has already won an influential signatory  -- Matthew Taylor, the author of the government’s ‘Good Work’ Review.


“This persuasive report identifies a weakness of apprenticeships as they are currently structured; namely that they cannot be accessed by employment agencies and the employees they place.

“As the report argues, this is particularly frustrating given these employees are among those who would most benefit from additional training,” he said.

Robyn Holmes, managing director of staffing agency Prime Appointments confirmed: “The Apprenticeship Levy is a frustration…we pay £30,000 annually into a pot but it can’t be used to help our temporary staff get work.”

In their report, the REC says: “There is a solution that would help over a million temporary agency workers gain access to more training opportunities: the government enabling recruitment businesses to use the large amount of unspent funding in their apprenticeship levy accounts on Ofqual-regulated training courses for their temporary workforce.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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