Janus Henderson co-CEO Andrew Formica has urged the U.K. government to rethink its approach to social mobility, describing the new apprentice levy as “a tax” on the industry and not fit for purpose.
Formica is a member of the Asset Management Taskforce, a group of fund firm CEOs with whom the U.K. government consults on asset management policy. He also co-founded the social mobility and diversity initiative Investment 20/20, a project to attract talent into the investment industry from a wider background.
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In an interview with Institutional Investor, Formica voiced his frustration with the current U.K. government’s approach to apprenticeships, following the introduction of an “apprenticeship levy” in April 2017, designed to boost the number of new U.K. learners.
Under the current rules, employers with a total payroll bill of £3 million or more have to pay an additional amount to the tax authorities. The Institute for Fiscal Studies estimated that it will raise £2.8 billion from employers in the 2019/20 financial year.
Formica — a fierce advocate for social mobility — said the levy was an example of the government failing to develop “higher principles” into policy. “The apprentice levy is a tax,” he said. “Investment 20/20 is something that we are happy to do but it doesn’t fit with the apprentice levy.” A spokesman for Janus Henderson confirmed that Formica’s comments referred to the notion that the Investment 20/20 program is ineligible to receive any funding via the levy.
When contacted by Institutional Investor, a government spokesman said it is committed to ensuring that high quality apprenticeships are a prestigious option, accessible to all people from all backgrounds.
“The apprenticeship levy provides a real opportunity for businesses to help tackle the skills issue which we are currently facing,” he said. “Unlike with other taxes, employers will be able to spend the funding themselves on their own apprenticeship training in England.”
Formica encouraged the U.K. government to embrace a cross-party approach to social mobility and diversity issues, saying that current vision had been “divided by party lines.”
In December, the Financial Times reported that all four members of the U.K. government’s social mobility commission had walked out because they felt the current administration was making insufficient progress.
“Government has vacated their role and responsibility in this area,” Formica said. “You have much more short-term thinking in government because they are thinking about the next election. They need to listen a bit more to the industry.”
“It should be ideally cross-party,” he continued. “They need to work together because is a multi-year solution and a multi-electoral cycle issue.”
Formica, is, himself, a product of a traineeship offered by a legacy Janus Henderson business.
“I came from an average background. I was sponsored by a company to go to university and I worked for them in the university holidays. When I left university, I joined them. It is the same company that I work for today.” Formica is chairing discussions within the Asset Management Taskforce on the issue of developing “home-grown” talent in the asset management industry as part of a two-year program. He is hoping to establish a corporate relationship between Janus Henderson and a university and potentially fund student scholarships in the future, although he said that these plans were, as yet, “not set in stone.”