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Ministers to give warning on apprenticeship levy

Published 04/02/2016

George Osborne announced a levy on companies to fund apprenticeships will be set at 0.5% of an employer's pay bill
George Osborne announced a levy on companies to fund apprenticeships will be set at 0.5% of an employer's pay bill

Leading politicians from the devolved legislatures are gathering to warn the UK Government its apprenticeship levy could undermine policies in their areas.

Scottish Skills Secretary Roseanna Cunningham will host Welsh Deputy Skills Minister Julie James, Northern Ireland Employment Minister Dr Stephen Farry and UK Skills Minister Nick Boles in Edinburgh.

They will call for greater clarity around the introduction of the apprenticeship levy from April 2017.

During last year's Spending Review and Autumn Statement, Chancellor George Osborne announced a levy on companies to fund apprenticeships will be set at 0.5% of an employer's pay bill.

It is expected to raise £3 billion in an attempt to fund three million apprenticeships.

The Government says the levy will only be paid on employers' pay bills over £3 million, resulting in fewer than 2% of UK employers paying it.

The ministers fear the levy has the potential to undermine devolved apprenticeship policies.

They are seeking the best method for fairly apportioning the levy raised across the devolved administrations, including transparency around UK departmental budgets.

They will also ask for content and timelines for the legislation that will introduce the levy into statute and stress the need to ensure the changing apprenticeship landscape will be clear to cross-border employers and providers.

Ms Cunningham said: "The introduction of the levy remains a matter of fundamental concern for us. It encroaches on our devolved responsibilities and is causing concern for employers.

"The UK Government has no control over how our administrations provide apprenticeships and to imply otherwise by collecting what amounts to an employment tax is misleading for any employer with operations outside England.

"We call upon the UK government to offer urgent clarity on the levy at today's meeting and to consider the wider implications of its introduction."

Ms James added: "We have been very clear from the outset that the Welsh Government has serious concerns about the apprenticeship levy and the impact it will have on the apprenticeship system here in Wales.

"I welcome the opportunity to discuss our shared concerns with the UK's other skills ministers."

Dr Farry said: "Along with my ministerial colleagues from Scotland and Wales, I am concerned that the imposition of the apprenticeship levy could have unintended consequences for the devolved administrations.

"This levy will be a further tax burden on large businesses and this could impact negatively on the UK's and Northern Ireland's ability to compete globally and to attract new business."

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