Oil and gas industry skills organisation responds to Institute for Fiscal Studies report on UK Apprenticeship Levy


31st January 2017

THE oil and gas industry skills, standards and workforce development organisation OPITO has responded to a report from the Institute for Fiscal Studies which shows the target of three million apprenticeships and new funding system around the UK’s new Apprenticeship Levy risk poor value for money.

From April 2017, all employers in the UK with an annual pay bill over £3million will have to contribute to the levy at a rate of 0.5% of their annual pay bill as a commitment to increasing apprenticeships.

The UK Government estimates that the levy will raise £3billion annually over the first five years following its introduction. With less than 2% of companies across the UK liable for the levy, OPITO believes the size of companies in oil and gas means the industry is likely to be disproportionately affected by its introduction.

John McDonald, managing director of OPITO, said: “The findings of this report add further weight to the concerns of our industry and many others over the effectiveness of the Levy in terms of generating value for businesses and quality modern apprenticeship opportunities for young people.

“The intention of the Levy is to create a rapid expansion in apprenticeships. In safety-critical sectors like oil and gas where the bar is set very high in terms of the robust apprenticeship framework required, there are very real concerns about the impact the levy will have in terms of whether the sector will be able to recoup any value from its investment in skills as well as the risk the policy poses to the continued development of comprehensive training programmes.

“OPITO would also like to see clarity around how the success of apprenticeships is measured at Government level, moving away from looking at the number of people starting apprenticeships and instead, evaluating how many are completing their training and moving into full time positions with employers.”

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