The UK apprenticeship levy risks damaging the current provision of training for all staff, as employers opt to cut back on the number of programme places to cover their costs, according to the British Chambers of Commerce (BCC), in a report from the CIPD (Chartered Institute of Personnel and Development).

The BCC has stated that it is unsure around how the apprenticeship levy will work in practice, and the potential for the cost of training apprentices to increase, had prompted employers to scale back successful training schemes across the whole of their organisations. They have also warned that any gains made in recent years in plugging the UK’s skills shortage could be wasted unless the government clarified the terms of the new scheme.

“We have heard of incidences where companies have had to cut back their existing training offers, which were successful, in anticipation of having to pay an apprenticeship levy, simply because their training was not an official apprenticeship," Adam Marshall, acting director general of the BCC, said.

The submission reads: “The levy model is effectively a payroll tax on business. It is a ‘one size fits all’ model, which, as currently designed, will struggle to deal with the various requirements of business when it comes to training their workforce. “It is important that the delivery of the levy does not undermine other types of vocational training, which could be better suited to some businesses.”

The Confederation of British Industry has also warned that reconsideration of the apprenticeship levy was needed.

“The Government must collaborate with business to radically rethink the design of the apprenticeship levy, if it is to deliver the quality skills training needed to support a more prosperous society,” CBI Director-General Carolyn Fairbairn, said.

“Firms across the UK are emphatic that tackling skills shortages is the only way to succeed and create prosperity,” Fairbairn said. “They want to create quality apprenticeships and they’re ready to work with the Government to do this. “But as it stands that’s not what the levy is doing.  We need to change that, which is why we are calling for a radical rethink.”

The BCC also claimed that the current levy model would encourage employers to “shoehorn” other forms of training under the apprenticeship banner to recover the overall costs.

“It is important not to fall into the fallacy of thinking that apprenticeships represent all the training that matters to businesses,” the submission read.

According to BCC figures, total employer expenditure on training increased by 6% between 2013 and 2015, from £43.0 billion to £45.4 billion, with apprenticeships just a small proportion of this. Today, the total spend on apprenticeships in the UK is around £1.8 billion, and is only expected to rise to around £3 billion with the apprenticeship levy.

The apprenticeship levy is due to be implemented in 2017 at the cost of 0.5% of an employer’s pay bill.