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Ministers join forces to reject apprentice levy scheme: Simon Hamilton and Mairtin O Muilleoir see no 'usefulness' in plan

By Margaret Canning

Published 15/11/2016

Simon Hamilton
Simon Hamilton

The Finance and Economy ministers have joined much of Northern Ireland business in rejecting the apprenticeship levy as a means of helping the development of apprenticeships.

In an unusual move, Finance Minister Mairtin O Muilleoir joined Economy Minister Simon Hamilton in a shared statement to reject the usefulness of the levy, announced only last year by former Chancellor George Osborne as a means of funding apprenticeships.

The Treasury yesterday revealed the sums that they anticipate will be raised by the levy - which will be payable by every firm with a pay bill of over £3m from April next year.

Northern Ireland would raise £76m in 2017/18 from the levy, which is charged at 0.5% of the total pay bill, less a £15,000 allowance. In the following tax years, it will raise £79m and £82m respectively. Sums raised in England will be spent on skills and apprenticeships — but there is no provision for the money to be spent in that way in Northern Ireland, Scotland or Wales, where skills are treated as a devolved matter.

The Finance Minister said he had concluded that the levy “is of no benefit to our budget”.

“Next year the apprenticeship levy gives the Executive a Barnett consequential of £76m. However, the cessation of funding for existing apprenticeships in England means a Barnett consequential loss of £52m. There is also a £29m levy on our public sector. This means there is no overall increase to the Executive’s budget.”

Simon Hamilton said that he had discussed the levy with Mr O Muilleoir. “It is bad news for Northern Ireland public and private sector organisations with a pay bill of over £3m.

“I will be launching a short and focused consultation to garner the opinions of those impacted.”

Stephen Kelly, the chief executive of Manufacturing NI, said the levy was “not welcome”. He added: “It has not been asked for by business nor indeed the Northern Ireland Executive and as such its introduction is not welcome.”

Ann McGregor, head of the NI Chamber of Commerce and Industry, said the Executive should spend the money on skills and training. “This deal does bring clarification for one of the major issues which we as a Chamber have been looking for assurance on.But the Executive must provide assurance it’s ringfencing the money for apprenticeships,” she said.

Wilfred Mitchell, policy chair of the FSB in Northern Ireland, said it welcomed the funding deal, adding that it should be used by the Executive to enable smaller businesses to train apprentices”.

Mark Huddleston, NI Commissioner for Employment and Skills, said that while business would hope the funding would be ringfenced for skills, it could decide otherwise. He said the levy was a “blunt instrument”, adding: “Politically, there may be more capital for the Executive to spend the money on health, or whatever its next problem happens to be at the time.”

Belfast Telegraph

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