The government is seeking views on the details of its proposals for a new funding regime for apprenticeships, with a levy on larger businesses and training subsidies for smaller firms. The levy charged to employers with a pay bill of more than £3m a year will be at a rate of 0.5%. As previously acknowledged, these larger businesses will have to pay two training levies, as they will also be paying CITB (link opens in new tab). Under the proposals, employers that are too small to pay the levy – around 98% of employers in England – will have 90% of the costs of training paid for by the government.   Levy-paying employers – those with a pay bill of over £3m that want to spend more on training than is in their ‘digital account’ – will get funding for 90% of their additional apprenticeship training costs. Employers with fewer than 50 employees will  have 100% of training costs paid for by government if they take on apprentices. Extra support – worth £2,000 per trainee – will also be available for employers and training providers that take on 16- to 18-year-old apprentices or young care leavers. “This announcement brings mixed news for construction, but it’s good that Government has responded to what we said on the challenges faced by smaller firms,” said CITB director of policy Steve Radley. “The co-investment rate for non-levy payers is lower than expected, at 10%, with the remaining 90% covered by funds raised  by the levy.  It’s also encouraging to see that smaller firms will be exempt from co-investment if they take on a 16-18 year old apprentice. With more than half of all construction apprentices under the age of 19, this is a win for the industry. Companies of all sizes will also appreciate the £1,000 incentive for taking on one of these younger learners.” The government has created a new online calculator to enable employers to understand how much levy they will pay and how they could use their digital funds to pay for training in future (link opens in new tab). The proposed apprenticeship funding system will be made up of 15 bands, each with an upper limit ranging from £1,500 to £27,000. The upper limit of each funding band will cap the maximum amount of ‘digital funds’ an employer who pays the levy can use towards an individual apprenticeship or that the government will co-invest. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands and it will be up to employers to negotiate prices with providers.  Radley added: “But there is still work to do to make sure ensure funding bands reflect the actual costs of training, so that apprenticeships are affordable for companies of all sizes. We will seek further clarification from Government on how the bands have been set, and together with industry, set out the likely impact on construction firms and their ability to take on apprentices.” “We will now work with Government to ensure the Apprenticeship Levy works for the construction industry. Today’s proposals will inform our ongoing work to reshape the CITB grants scheme, so that it supports the most-needed skills and helps employers take on the apprentices construction vitally needs.” Apprenticeships and skills minister Robert Halfon said: “We need to make sure people of all ages and backgrounds have a chance to get on in life. Apprenticeships give young people – especially those from disadvantaged backgrounds – a ladder of ‎opportunity.” He added that businesses can only grow and compete on the world stage if they have the right people, with the right skills. “The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.” CBI director-general Carolyn Fairbairn said: “The Government’s announcement provides business with much needed information which shows some progress, including support for smaller firms, but fundamental problems remain. The Levy is too narrowly defined. It covers only one type of training and employers can only reclaim off-the-job costs. As a result, valuable forms of training risk being cut back, with quantity put ahead of quality.” She added: “The April 2017 start date will not give firms sufficient time to prepare, so we urge the Government to delay implementation. Though business understands the fiscal challenges, it would be a great mistake to rush ahead before a viable scheme is ready.” The new apprenticeship funding proposals look like a “fair settlement for small employers”, according to the Federation of Master Builders (FMB). FMB chief executive Brian Berry said: “Small and medium-sized firms do the majority of training in our industry – micro businesses (those employing fewer than ten people) alone train around half of all construction apprentices. It is therefore crucial that new apprenticeship funding arrangements work for these firms and do not impose higher costs on them.” Berry continued: “The funding arrangements announced today appear to strike a reasonable balance, which takes into account the support that small employers need. Those employers with wage bills of less than £3 million, who will fall beneath the threshold for paying the new Apprenticeship Levy, will be required to pay 10% contributions towards the cost of training and assessment. This means most small employers should not end up paying more towards training costs than they currently do.” However, he was concerned about the difficulties and complexities that might come with the new digital apprenticeship service. “Small firms express nervousness at the more hands-on role they are being asked to play in negotiating with and paying training providers, and there is real danger in the new system being time-consuming and complicated to a degree which puts off small firms from training.” Employers and training providers can give feedback on the proposals by completing a survey by 5 September (link opens in new tab). Final funding proposals will be confirmed in October 2016.

Wates Living Space Maintenance has won a £24m contract to provide responsive repairs and voids maintenance for housing association Network Homes. Wates Living Space Maintenance will provide a round-the-clock service, 365-days-a-year, for approximately 13,900 homes across London and the home counties. The contract runs for an initial five years with an optional five-year extension Wates personnel will work out of Network Homes’ offices to deliver a collaborative and open book service. Network Homes director of asset management Gerry Doherty said: “Having a top quality responsive repairs service is absolutely essential to helping us achieve our ambition of 90% customer satisfaction. Our appointment of Wates is a major step towards this and I am confident we will keep improving and providing an excellent service to our customers.” David Morgan, managing director of Wates Living Space Maintenance, said: “Wates Living Space Maintenance shares Network Homes’ commitment to continually better our offering to residents, which will be achieved throughout this programme via our innovative round-the-clock service delivery. We are now focused on mobilising our teams and ensuring that our client’s investment is realised effectively and efficiently, ultimately upholding the quality and comfort that they proudly offer to their customers.”       This article was published on 9 Sep 2016 (last updated on 9 Sep 2016). Source link

Growth of limited company BTL marks change in landlord behaviour Lending to buy to let investors borrowing via limited companies grew in the first half of the year according to the results of the H1 2016 Limited Company Buy to Let Index. The number of lenders and products available to limited company borrowers also increased. According to transactional data the number of buy to let mortgage applications completed by limited companies grew to 30% of all buy to let completions, up from 21% in H2 2015, and 18% in H1 2015. By volume (£m loan amount), the number grew to 30% of all buy to let loans, up from 25% in H2 2015 and 20% in H1 2015. The number of lenders offering products to limited company borrowers also increased in the first half of the year to 14 from 12 in H2 2015. The rise was due to existing buy to let lenders introducing limited company products rather than new lenders entering the BTL sector. Lenders offering limited company products now account for 42% of the whole BTL lending sector, up from 30% in H1 2016. Product numbers increased to an average of 154, up from 147 in the last six months of 2015, although the actual proportion of them as a percentage of the whole BTL market fell due to the increase in product numbers available to individual borrowers. Whilst average products numbers for limited companies accounted for 13% of all BTL products in H1 2016, it is interesting to note that by the end of June the percentage had risen back to 16% of all BTL products, the same percentage recorded in H1 2015. Commenting on the results of the index, David Whittaker, Managing Director of Mortgages for Business said: “Both applications and completions for limited company borrowers appear to have stabilised at around one third of all buy to let business. However this masks a dramatic change in the investment pattern for new purchases where the proportion investing through limited companies has risen from less than 20% by number (25% by value) in the first half of 2015 to over 50% in 2016, with second quarter applications by limited companies running at over 60% of total applications related to purchases of buy to let properties. This increasing proportion will also drive an increase in the proportion of completions in the next quarter. There has only been a slight uplift in the proportion of remortgaging activity that relates to limited company borrowers, due to historical investment patterns. It would, however, appear that some landlords who already own property personally are sitting on their hands somewhat and holding back from remortgaging, probably waiting to see how the economy pans out post-referendum. With the Chancellor announcing his intentions to lower corporation tax to 15% following the Brexit result, we may even witness more landlords financing buy to let property via corporate vehicles. “Clearly, the trend for limited company buy to let represents a real step change in behaviour as landlords adapt their investment strategies to mitigate the increased costs brought about by recent changes in the tax regime.” In March 2016, the number of completed limited company BTL applications more than tripled compared to any other month in the first half of the year as investors, brokers and lenders raced to get deals over the line ahead of the introduction of the stamp duty surcharge which came into effect on 1 April 2016. Whilst pricing appeared stable across the whole market in the first half of the year, rates for limited company products rose marginally to 4.5% from an average of 4.4% in H2 2015.  This means that limited company products are now 0.8% points more than the average price of a buy to let mortgage (3.7%), due to the increased underwriting costs involved in assessing limited company applications. Mr Whittaker said: “Last year I had thought that limited company pricing might come down a bit as some lenders, including our own lending brand Keystone Property Finance, chose to absorb the increased costs and offer the same rates to landlords borrowing both personally and via the limited company route. The fact that this has not happened may encourage more lenders to enter the space.” Source link