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People 1st warns apprenticeship levy could cost hospitality £100m+

25 September 2015 by
People 1st warns apprenticeship levy could cost hospitality £100m+

Proposals to introduce an apprenticeship levy could cost the hospitality sector in excess of £100m, and People 1st has urged the industry to have its say on the way in which it is run.

People 1st warned that failure by employers, associations and training providers to speak out on the issue could result in the introduction of a complex and unmanageable system.

Chancellor George Osborne announced the move in his last Budget, saying it was a "radical, long overdue" approach to apprenticeship funding.

The proposals would see large employers contribute the most towards funding apprenticeships, with a separate, as yet unannounced, arrangement for smaller businesses.

People 1st said the Government had not yet provided details for what it defines as a "large employer" but that it was expected to be 250+ employees.

The Confederation of British Industry (CBI) has suggested that the levy will see employers contribute 0.5% of payroll, regardless of whether they engage with new-look apprenticeships. People 1st said that for some, this figure was too high.

It estimates that the levy could end up costing businesses in the hospitality sector in excess of £100m and has joined calls from employers for a more straightforward levy system in which the sector plays a leading role.

A public consultation is set to run until 2 October 2015. Simon Tarr, chief executive of People 1st, said: "It's our concern that without sufficient input from the very businesses this levy is set to affect, some of the suggestions made in the government's consultation could result in a complex and unmanageable system over which employers will have only limited control.


"If the levy is implemented and managed appropriately, this represents a huge opportunity for the industry to build a pool of talented staff that will help address key challenges including productivity and retention."

Employers, associations and training providers are being urged to contribute to a united, sector-wide response - managed by People 1st and accessible here: http://bit.ly/1Yy1sbd

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