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Unprepared rail bodies at risk of losing out over looming apprenticeship levy changes

Rail organisations could be hit hard by changes to the apprenticeship levy if they are unprepared for the changes that come in April, the chief executive of the National Skills Academy for Rail (NSAR), Neil Robertson, has warned.

New regulations mean that employers with wage bills of more than £3m have to put 0.5% of their payroll into the levy to fund apprenticeships in their organisations, as part of the government’s aim to double spending on the schemes in England and create 30,000 rail and road apprenticeships by the end of this Parliament.

However, a recent survey, which garnered responses from 500 senior decision-makers, has shown that a third of employers who will have to pay the levy are unaware of its existence, whilst as many as 28% are unsure of whether the levy will affect their business or not.

“The effects of the new levy on the rail industry will be significant,” explained Robertson. “If managed and run correctly, the new changes need have no adverse financial effects.”

Robertson, who previously told RTM that the industry’s job is “to get as much money back from the levy as possible”, went on to warn that the levy would become “just another government tax” if organisations simply ignore it.  

“That said, the good news is that many rail companies are responding in a practical and positive way to these changes,” he added.

“The employers we’ve spoken to that have already got to grips with it have confirmed that it is likely to encourage them to hire more. But it is also good news because it can help provide greater control of apprenticeship programmes and improve their quality.

“It will also place greater focus on apprenticeship opportunities which will help fill vacancies, something that can be a challenge.”

One member of NSAR, Go-Ahead, also emphasised the importance of the changes to the levy. Its HR director, Val Proctor, said: “As a forward-looking employer, we always look to invest in the long-term training and development of our people.

“We also place great importance on having a collaborative approach to create long-term value for the company and its employees. That’s why we see the introduction of the levy as being about a whole lot more than just a new tax. Instead, we’re working with the government and our partners to use the levy to help us create a better workforce all round.”

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