People and culture

Government warned against raiding charities to fund private sector apprenticeships

Charity Finance Group and 23 of the leading national charities have written to the Education Secretary calling for Government to reform the Apprenticeship Levy so that charitable funds aren’t used to subsidise private sector apprenticeships and are instead used to build skills in the charity sector.

Under existing rules, charities that can’t spend their levy funds in full will see unspent funds redirected by Government to private businesses.

The joint letter shows that charities in particular will struggle to pay the Apprenticeship Levy, which means that charitable money will be used to subsidise private sector apprenticeships.

For some charities this could be hundreds of thousands of pounds that could otherwise be spent on delivering their charity’s mission.

Charity Finance Group (CFG) and its member charities have consistently raised this problem with Government. Last March, the then Skills Minister, Nick Boles told CFG that employers, including charities, would be able to transfer their levy funds to other employers, which would stop charity funds leaving the sector.

Today, the Government has confirmed that they will be limiting the amount that employers can transfer to 10%. CFG and its co-signatories are calling for Government to increase this limit to 100% for charities.

The public do not want to see charitable funds leaving the sector via the Apprenticeships Levy.

Polling commissioned by CFG and carried out by ComRes shows that the public do not want to see the Government redirecting charity money to private companies via the Apprenticeships Levy:

  • 46% of British adults believe that unused Apprenticeship Levy funds from charities should only be transferred to other charitable organisations (32%), or should not be transferred at all (15%); and
  • Only 14% of British adults believe that charities should pay the apprenticeship levy at all – this is compared to 58% who believe private companies should be subject to the levy, and 44% who believe public sector organisations should pay.

Commenting on the Government’s decision, Caron Bradshaw, Chief Executive of CFG said:

“It is disappointing that the Government has decided not to make the simple change to allow charities to protect their funds and ensure that the levy is being used to develop skills in the charity sector.

“Charities want to ensure that they are supporting their employees to develop, and with Brexit on the horizon it is more important than ever that they are able to increase skills in their workforce. However, as it currently stands, the Apprenticeship Levy will prohibit charities from doing this.

“We now are less than a month away before the levy is introduced and it is vital that the Government acts now and reforms the levy before it is too late. To not do so will risk undermining our sector’s ability to support the people and communities that rely on charities, at a time when they are being asked to do more” she added.

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