£3 billion levy on firms ‘could hit devolved apprenticeship plans’
5 February 2016
Ministers from Wales, Scotland and Northern Ireland have voiced concern to the Government about plans for an apprenticeship levy on companies.
Employment and skills ministers from the three countries told the Westminster administration that the levy could undermine devolved policies on apprenticeships.
They called for greater clarity around the introduction of the apprenticeship levy from April 2017.
The levy will be set at 0.5% of a large employer’s pay bill, and is expected to raise £3 billion to fund three million apprenticeships.
Julie James, Welsh Government Deputy Minister for Skills and Technology said: “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.
“The levy is an unwelcome new tax burden for Welsh employers, and means Welsh public services will have to pay money back to the Exchequer when they are already under pressure.”
Northern Ireland Employment and Learning Minister, Dr Stephen Farry (pictured) 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.”
Roseanna Cunningham, Scotland’s cabinet secretary for skills, added: “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.”
Neil Carberry, CBI Director for Employment and Skills, said: “Businesses across the UK share the concerns of skills ministers in Northern Ireland, Scotland and Wales about how a UK-wide tax can genuinely incentivise high-quality apprenticeships in all four nations, each with their own skills policies and priorities.
“Business stands ready to help ensure the levy is as successful as it can be, but urgently requires clarity on how the system will work, as companies are making investment decisions now in the face of a substantial new tax.”
“Ensuring revenue raised by the levy is ring-fenced by each of the governments for employer training is something the CBI has called for since the policy’s announcement.”
Skills Minister Nick Boles said: “For too long, UK employers have underinvested in skills. This is bad for our economy, our businesses and means our young people haven’t been given the chances they deserve. The apprenticeship levy tackles this head on.
“The levy will only be paid by the largest 2% of businesses and will create life changing opportunities for young people across the country. Devolved administrations will continue to have complete flexibility over training and apprenticeships and will have control over how they spend their levy funds.”
Photo © Northern Ireland Executive (CC BY 2.0). Cropped.