VIEWPOINT
WHY WE SHOULD RETHINK THE APPRENTICESHIP LEVY Daksh Gupta, CEO Huws Gray
APPRENTICESHIPS ARE SOMETHING of a bugbear of mine at the moment. Whenever I talk to business leaders, whether they’re in construction, automotive, leasing, finance or technology, I hear the same frustration. The Apprenticeship Levy was introduced with good intentions, but for many businesses it has become little more than a tax.
That’s not how it was supposed to work. Take our own business, Huws Gray, as an example. With a payroll of more than £200 million, we’re paying around £1 million a year into the apprenticeship levy. We can reclaim that money for approved training and development, but a significant proportion of levy funding across the economy goes unused every year.
What I struggle to understand is why the Government insists on dictating exactly how that money can be spent. If Ministers genuinely want to boost employment, support young people and stimulate economic growth, there is a remarkably simple change they could make. Why not allow businesses to use their Levy contributions directly to recruit and employ young people? It seems such an obvious solution to me. The mechanics are already there. Businesses already contribute the money. Senior accounting officers are already responsible for ensuring the levy is paid. There would be very little additional administration required.
Imagine a simple rule: if a company employs people aged between 16 and 21, it can draw down its Levy pot to support those hires. If that existed tomorrow, I genuinely believe I could recruit more than 20
young people immediately. And I don’t think we’d be alone. Businesses across the country would jump at the opportunity because there are benefits for everyone involved.
For employers, the issue is that they have already set that money aside. Instead of seeing it disappear into what many perceive as another tax, they should be able to invest it directly into their future workforce. For young people, this could create opportunities that simply don’t exist today. For government, it would reduce the benefits bill, increase employment and bring more people into the tax system. And for the wider economy, it would help address one of the most persistent challenges we face: giving young people a route into work.
That’s why I find it so frustrating. Every time I raise this idea, nobody can give me a convincing explanation as to why it couldn’t work.
In my view, it could be implemented incredibly quickly. It doesn’t require years of consultation or a wholesale redesign of the tax system. It’s a practical change that could have an immediate impact. The timing is particularly important because we have a growing problem around youth employment. Recent statistics have
highlighted the number of young people who are not in education, employment or training. At the same time, businesses continue to report labour shortages and skills gaps. Those two facts should not be able to coexist. Yet they do.
Part of the issue, I believe, lies in the unintended consequences of wider employment policy. Take minimum wage increases.
July 2026
www.buildersmerchantsjournal.net “ The
challenge is not simply about
employment numbers. It’s about careers, confidence and long-term economic
participation.”
I understand entirely what policymakers are trying to achieve. The principle of ensuring people earn a decent wage is one I support. But every policy has consequences, and sometimes those consequences are not fully thought through. As a business owner, the issue is that, with the cost difference between hiring a 19-year-old with no experience and someone with five years of experience becoming relatively small, who are you likely to recruit? It’s not difficult to see why many employers choose the experienced candidate. That leaves young people trapped in a vicious circle. They cannot get experience because nobody will hire them, yet they cannot get hired because they lack experience. We’ve created a situation where many young people are effectively locked out of the labour market at precisely the point where they need their first opportunity. That should concern all of us.
The challenge is not simply
about employment numbers. It’s about careers, confidence and long-term economic participation. Every successful professional started somewhere. Someone gave them a chance. The question we should be asking is whether our current policies are making it easier or harder for businesses to provide those opportunities. I’m not convinced we’re getting the balance right.
There is also a broader issue emerging around pay compression. As wage floors rise, the gap between entry-level roles and more experienced positions narrows. Again, the intentions are understandable, but the long-term effects on recruitment, progression and workforce development deserve closer scrutiny.
That’s why I believe now is the right time for policymakers to step back and ask some difficult questions. Is the apprenticeship levy achieving everything it was designed to achieve? Are we maximising the value of the money businesses contribute? Are we creating enough opportunities for young people? And most importantly, are we helping employers become part of the solution?
From where I sit, there is a straightforward opportunity sitting in front of us. Allow businesses greater flexibility in how they use levy funding. Trust employers to invest in young talent. Give companies a direct incentive to recruit people at the start of their careers. If we did that, I believe we’d see thousands of new opportunities created almost overnight. Sometimes the best solutions are not the most complicated ones. This feels like one of those moments. BMJ
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