Almost a million workers in England on temporary contracts have been shut out of the government’s apprenticeship scheme despite their employers providing about 5 per cent of the funding levy.
The Recruitment & Employment Confederation (REC), which represents recruitment agencies, found that about 670 of its members collectively paid £110m into the levy scheme each year but only spent £6m. The total paid in by all employers in 2017-18 was £2.2bn.
Agency workers are employed in a range of jobs, from social care professionals to factory workers, and are paid by a recruitment agency or employment business rather than by the organisation where they work.
As a result, many recruitment agencies have to pay into the apprenticeship levy even though they may employ only a few people to provide services to temporary workers. Under the levy, employers with annual payrolls over £3m set aside an equivalent of 0.5 per cent of their total wage bill each year to fund workplace training.
Money that cannot be spent after two years is kept by the Treasury.
However, 47 per cent of the recruitment agencies surveyed by REC said they had been unable to spend any of their levy funds because of rules on the length people must work for an employer to receive training being too restrictive for agency workers.
An apprenticeship under the levy’s rules must last a minimum of 12 months but 960,000 out of 1.02m temporary and contract workers in 2017-18 were on assignment for less than a year, the REC report noted.
Agency workers that do remain in post for more than a year could still be ineligible for levy-funded apprenticeships because of the requirement for 20 per cent of their employment hours to be spent in off-the-job training.
Given that most agency workers are hired to fill peak periods of demand, employers are highly unlikely to be willing or able to give an apprentice this amount of time away from the workplace, according to the REC report.
Prime Appointments pays £30,000 annually in levy fees but has not been able to use any of it on the temporary staff it helps to find work, according to Robyn Holmes, founder and managing director.
“The apprenticeship levy is a frustration for us,” Mr Holmes said. “A lot of people want to become a carer but can’t afford to do the training.”
Philip Hammond announced a review of the levy system in his Budget statement last autumn. The REC is lobbying for the government to consider allowing levy payers to use their money for shorter training schemes, such as those provided to teaching assistants, heavy goods vehicle drivers and basic digital skills courses.
“It’s time for reform,” Neil Carberry, REC chief executive, said. “Keeping support in place for apprenticeships matters, but we must end the scandal of locking temporary workers out of the system.”
