The Department for Business, Innovation and Skills has published the Apprenticeship Levy Employers Guide, but the Charity Finance Group still has some concerns.

The government announced plans in the last Spending Review and Autumn Statement to introduce an apprenticeship levy from April 2017. The levy will require employers with a wage bill of more than £3m to pay a levy of 0.5 per cent through Pay As You Earn. The money raised will be used to fund apprenticeships.

Employers may use the money they contribute through the levy to employ apprentices in their own organisation. If they choose not to do so the money will be distributed elsewhere.

The levy is expected to raise £3bn by 2019/20. However, it has been estimated that around 1,200 charities in the UK will be affected at a cost of £70m.

Anjelica Finnegan, senior policy and public affairs officer at CFG, said that having read the guidance, she is concerned that charities will not be able to redirect their funds in the first year at least, and the government are yet to make a decision on how the process will work. She said that this comes after the skills minister Nick Boles said that this would be the safeguard against charitable funds being redirected to private businesses.

There are still no details about how employers, including charities, can become recognised training providers. Finnegan said that “without being a registered provider charities will not be able to spend the levy on costs of in-house training that they might provide. This will either result in them not using this training which they have invested in, or having to pay for both”.

Finnegan also said that, because employers will pay the levy monthly, this will mean that charities will potentially have “little time to prepare to start paying the levy and it will make it far more difficult for them to plan their finances accordingly”.

She said that CFG is also concerned that that there is now more uncertainty for charities that employ people across the UK about how much they will be able to spend as apprenticeships are a devolved policy – meaning Scotland, Wales and Northern Ireland will manage their own programmes, including how funding is spent on apprenticeship training.

This means that the calculation to determine how much charities will have to spend through the English system if they employ people who live in devolved countries is still to be determined and employers will only be assessed in early 2017, months before the levy is introduced. Finnegan said that this makes it difficult for those charities to plan.