Exempt small schools from 'discriminatory' apprenticeship levy, councils urge

Councils and heads call on government to rethink plans

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Small maintained schools should receive the same treatment as small academies and faith schools by being exempt from the apprenticeship levy, councils have said.

The Local Government Association (LGA), which represents councils, said all schools with a wage bill of less than £3 million a year should be exempt from the levy.

The levy, which will be introduced next April, will see all businesses including schools with a wage bill over £3 million a year contributing 0.5 per cent of that wage bill to fund new apprenticeships. However, schools with a smaller wage bill that are maintained by the local authority will also have to pay.

Where a school employs its own staff, for example an academy or faith school, it is exempt from the levy if its wage bill is under the £3 million threshold.

However, when a school is maintained and its staff are technically employed by the local authority, those staff contribute to the overall wage bill of the council – rather than being counted separately. This means that the apprenticeship levy is applied to them, and will need to be accounted for in school budgets from April 2017. 

'Schools dealt a poor hand'

Richard Watts, chair of the LGA’s Children and Young People Board, said: “It is discriminatory for small council-maintained schools not to be exempted from the apprenticeship levy in the same way that small academies and faith schools will be.

"They will be forced to find additional money to pay the levy, whilst an academy or faith school with an identical wage bill can invest that money in making sure their pupils get an excellent education.

“It is no secret that many schools are struggling with their funding, yet once again, council-maintained schools are being dealt a poor hand compared to academies."

School leaders’ union NAHT backed the LGA's call. General secretary Russell Hobby said: “School budgets are already being pushed beyond breaking point. Figures released by the National Audit Office last year show that school funding is being cut by £3 billion in real terms – destroying the government’s claims that school budgets are protected."

When the National Funding Formula was announced, the government promised that no school would lose more than 1.5 per cent of its budget, Mr Hobby highlighted. But, he added, the apprenticeship levy will mean that council-maintained schools of any size will lose a further 0.5 per cent of their staff budget.

'Step on the ladder of opportunity'

The NAHT is also calling for the government to recognise new training and apprenticeship schemes that schools can access, using the dedicated apprenticeship funding gathered by the levy. "Currently small schools are faced with paying into a fund they may not be able to benefit from", said Mr Hobby.

Apprenticeship and skills minister Robert Halfon responded: “The apprenticeship levy will boost our economic productivity, while increasing the country’s skills base and giving millions a step on the ladder of opportunity.

“In the majority of cases, local authorities will be responsible for paying the levy in the community schools they maintain, rather than the schools themselves.  We expect these schools to have full access to funding for apprenticeship training and will support all employers, including schools and local authorities, in using levy funds to invest in quality apprenticeships.”

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