The government has missed its deadline to provide crucial details on the structure of its proposed apprenticeship levy.
The Department for Business, Innovation and Skills told Construction News it could no longer meet its June deadline to provide details on how different apprenticeships would be capped.
The apprenticeship levy is part of the government’s plans to create more than three million new apprentices by 2020.
The levy, which is due to come in next April, will see companies with annual wage bills over £3m paying 0.5 per cent of their PAYE into a government fund.
As part of the levy, types of apprenticeships will be banded, with the government setting a maximum limit on what can be spent on each standard of apprenticeship.
Contractors fear these limits will be lower than the amount it costs to train certain types of apprentices, and that companies will have to foot the extra cost.
The CBI and Civil Engineering Contractors Association called for more clarity on the banding levels back in May, with both urging government officials to release further details as soon as possible.
BIS said at the time that it would release more information on the banding caps in June, alongside other details.
The department has now told Construction News it will not meet that timeframe and there will be a “short delay”.
It said it will continue to work with employers to design the apprenticeship levy but had no confirmed date for exactly when further details would be released.
Skills minister Nick Boles warned before the EU referendum that a vote to leave may result in the levy being scrapped, but has since rowed back on that.
He told the Association of Employment and Learning Providers national conference this week that “we should continue to work on the basis that the apprenticeship levy is coming in April of 2017 as planned, and in the way it was planned”.
CECA chief executive Alasdair Reisner warned any long-term delay could result in BIS having to push back the implementation of the levy.
He said: “While industry recognises that this has been a fundamental earthquake that has happened in Whitehall – so a short hiatus in a decision is reasonable – it is important this doesn’t turn into a long-term delay.”
Earlier this month, Construction News revealed that more than 900 contractors would have to pay both the apprenticeship levy as well as the CITB levy for a year.