Is the Apprenticeship Levy beneficial to the construction industry?

With the introduction of the governments new Apprenticeship Levy set to take place in April and the growing pressures of the skills shortage, we ask: can the new tax have a positive impact on the construction industry?

So, what is the Apprenticeship Levy? In April all firms receive an offset allowance of £15,000, equivalent to 0.5% on a payroll of £3 million, towards training. Any companies with a payroll of more than £3 million will be liable to pay the levy.

“60% of construction owners start their careers as an apprentice”

With the Federation of Master Builders (FMB) stating that 60% of construction owners start their careers as an apprentice, it is clear that there is already an established career route from construction apprentice to managerial roles (or “Brickie to boss” as Brian Berry, the Chief Executive of FMB puts it).

The FMB found Bricklayers can earn up to £31k a year within 5 years of qualifying. Alongside great earning potential, 80% of SME owner’s reported that employment in construction offers high levels of job satisfaction and tangible results. The levy will force large construction companies to do their bit to secure the construction industries future but it’s becoming apparent that educating young people with the benefits of an apprenticeship is the missing link towards tackling the skills shortage.

“80% of SME owner’s reported that employment in construction offers high levels of job satisfaction”

Led by the government and industry giants, the levy should be coupled with investment in raising awareness of the benefits of an apprenticeship and career in the construction industry, pushing the sector into the limelight and encouraging more apprentices to enter the sector. The FMB found that the significance of a completed apprenticeship is still considered more valuable than a related university degree, according to 98% of SME directors.

The levy will also give employers the opportunity to put money aside to spend specifically on building their organisation and with digital vouchers only being spent on vetted training providers, employers can find peace of mind that apprentices are receiving the best education.

Now the skills shortage has the added strain of a hard Brexit, we think the push of the apprenticeship levy might be the help the sector needs. We just hope that now that this money is in place, that any aspiring apprentices are led in the right direction to secure the future of construction in the UK.

Sources:

https://www.fmb.org.uk/about-the-fmb/newsroom/nearly-60-of-construction-bosses-start-their-careers-as-an-apprentice/
https://www.citb.co.uk/documents/levy-grant/apprenticeship%20levy%20factsheet%20from%20citb%20may%202016.pdf