PM draws flak over £2bn levy on businesses

Prime Minister David Cameron

A close ally of Prime Minister David Cameron accuses the government of feeding an army of consultants by creating red tape in subsidies for on-the-job training….reports Asian Lite News

Prime Minister David Cameron addressing the press at No 10 Downing Street (File)
Prime Minister David Cameron addressing the press at No 10 Downing Street (File)

Sebastian James, CEO of Dixons, attacked one of the government’s core business policies, highlighting inconsistency, bureaucracy and the cost in public subsidies.

At The Times CEO summit, Mr James confronted Sajid Javid, the business secretary, about proposals in the budget to impose a levy on companies that would then be ring-fenced to pay for on-the-job training.

“The apprenticeships scheme seems very bureaucratic,” said Mr James, whose company has employed 550 apprentices in the last five years. He said, “I’m concerned that you charge people on the one hand, then give the money back using some kind of voucher scheme that will no doubt spawn an industry of consultants and add a lot of friction and cost.

“I’m worried that this isn’t the most efficient way to drive either productivity or apprenticeships.” James added.

Mr James’s remarks echo frustration in business circles over the way that ministers are handling apprenticeships, says The Times.

Chancellor George Osborne has set a goal of creating three million apprenticeships in England this parliament. Experts have predicted that the new levy may need to raise £2 billion annually, on top of the £1.5 billion already spent out of general taxation.

The Federation of Small Businesses said that ministers have become obsessed with creating vast numbers of apprentices, rather than concentrating on the quality of schemes.

“The increasing focus on vocational on-the-job training is the right approach but we must not let the drive for greater numbers come at the expense of quality,” John Allan, the federation’s chairman, said, The Times report points out.