The Director General of the Confederation of British Industry (CBI), Carolyn Fairbairn, is shaking things up after calling for a “radical rethink” of the government’s flagship apprenticeship levy. She is warning officials that the fundamental flaws of the new levy will drive the “wrong outcomes” and encourage “rogue employer behaviour”.

Fairbairn spoke to a group of business leaders recently to further expand on her statements. She said employers would be encouraged to “rebadge their existing programmes” and even go as far as abandoning “much training that’s already working” in order to meet costs and required specs outlined by the new levy guidelines.

The new levy will become effective next April at an initial rate of 0.5 percent of the employer’s total payroll. The percentage will apply to firms with salary costs higher than £3 million. In 2018, however, all other organisations looking to run an apprenticeship programme will have to use the government’s Digital Apprenticeship Service.

The government did release an initial set of guidelines with a simple framework of how the levy will work, but promised more clarity come summer. Fairbairn emphatically believes firms still lack crucial information about the levy and are handicapped by the unfair and unrealistic lead-in time to prepare.

Fairbairn said:

"Firms across the UK are emphatic that tackling skills shortages is the only way to succeed and create prosperity. They want to create quality apprenticeships and they’re ready to work with the Government to do this. But as it stands, that’s not what the levy is doing.

Today, firms are having to treat the levy as a tax, because the headline cost is all they’re certain of. Businesses of all sectors and sizes are still in the dark – cutting corners isn’t in anyone’s interest."

Fairbairn is urging the government to rethink the new levy before an employer-wide chaos occurs.