The Chartered Institute for Personnel and Development (CIPD) has revealed industry employers plan to reduce investment in other areas of their business to cover costs on the new Apprenticeship Levy.

In its 'Employer views on the Apprenticeship Levy' report, CIPD stated 36% of employers will reduce investing in other areas of workforce development, while around 29% said they will adapt existing training programmes to offset costs of the new tax.

In addition, a third (35%) of employers support the principle of the levy, over a quarter (27%) oppose it and 38% say they don’t know where they stand.

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The levy targets employers with a pay bill of over £3 million each year and will come into effect from April 2017.

The initiative aims to use the funding to invest in apprenticeships, with a target of three million new training positions created by 2020.

Neil Barberry, Director for Employment and Skills policy at the Confederation of British Industry (CBI), said while the Government's ambition to increase apprenticeships is positive, the levy's design and timetable "poses real risks to quality and provision of training".

"Across the business community there is deep concern about the system in its current form, and this research demonstrates the need for a radical rethink," he said.

"The system needs to work for the country, not just Whitehall. It is crucial that businesses have time and space to continue the work they are doing with government to try and shape the design before its introduction. Creating a flexible system that encourages employers to spend on quality training then recover their costs is the best way of ensuring the levy helps deliver the higher level skills we all want to see."

(LM/MH)