The new levy will require all employers with an annual pay bill of over £3m a year to pay 0.5% of their pay bill into a new fund. Employers will then be able to draw on the fund to pay for apprenticeship training for their staff. The fund is expected to reach £2.8bn. The government aims to have 3m apprenticeships in England by 2020.

Bull told an audience of recruiters at an ARC (Association of Recruitment Consultancies) conference in London last week that recruitment agencies, such as Randstad and their temporary agency workers, would be disproportionately and unfairly affected by the new levy as the 0.5% charge will be based on the value of their agency payroll, and not just on the pay bill of their own employees. 

Bull said because of the size of its temporary worker pay bill, Randstad would pass the £3m threshold for paying the 0.5% levy within days of it coming into effect on 6 April.

“The levy is complete and utter madness,” said Bull, who was a panel member at the event. He explained that although Randstad intended to access the levy to fund training of its own staff, this benefit paled into insignificance against the amount it would have to pay out based on the size of its temporary agency worker payroll. This was money that Randstad would have to pay out, but because the rules state that only workers who have been employed for a year and a day qualify for apprenticeship training funding, neither Randstad’s temporary workers nor Randstad itself stand to gain. 

“The levy is unworkable in its present from for temporary workers,” said Bull.

He said the effect could be mitigated if Randstad’s application to become an accredited apprenticeship-training provider is successful, in which case it gets paid for the training it provides. However, he concluded: “No matter what we do and how well we do it, there is no way we can’t lose money.” 

Describing the levy as “a payroll tax and a blunt instrument”, Bull called for the money that Randstad’s temporary workers couldn’t benefit from “to go into a fund for the greater good.” However, he said under the government’s current plans that would not happen. 

Speaking at the conference, Adrian Marlowe, chairman of ARC said the levy was “an absolute and complete mess” that treated the sector disproportionately and discriminated against temporary workers. However, he said the government’s position was clear: “That the levy was intended to be used by employers for their own employees only and was not intended to be used by agency workers.”

Richard Olney, chief finance officer at healthcare recruiter Your World Recruitment Group, an attendee at the conference, told Recruiter the levy was unfair. “It is based on our payroll but our temporary workers cannot benefit from apprenticeship training,” he said.