The Department for Business, Innovation and Skills (BIS) has issued a new consultation which outlines ambitious plans to place a levy on all large employers in England to help fund three million new apprenticeships. The size of levy a business will be required to pay will vary according to the number of people it employs and will be paid through PAYE returns to HMRC.

It is proposed that funds raised by the levy will then be accessed by all employers through a digital voucher system, with vouchers being available to all sizes of employer whether they pay the levy or not. The vouchers would then be used by employers to buy apprenticeship training from a bank of licensed providers.

It is envisaged that employers who are committed to apprenticeships will be able to access funding that is greater than their contribution to the levy. This could be funded through the redistribution of vouchers left unused by less enlightened employers.

Funds from the levy would be used solely for the delivery of training and not be diverted into related activity such as the development of new apprenticeship standards.

Some complex issues emerge from the consultation such as the England-only nature of the levy, how to ensure quality and value for money, encouraging employers to offer apprenticeships to 16-18 year olds, and what to do in the construction industry where a separate training levy already exists. It does not seek views on the size of the levy or on the size of the employers that should be liable to pay the levy.