Scotland, Wales and Northern Ireland 'overlooked' by apprenticeship levy

2nd February 2018 at 00:00
With skills policy a devolved matter, there are big differences between the nations of the UK with how apprenticeship levy funds are spent

The devolved administrations in Scotland, Wales and Northern Ireland have said they have been "undermined and overlooked" by the government’s flagship apprenticeship levy.

All UK nations have committed to spending levy funds on education and skills but only a small proportion of the plans outlined by Scottish, Welsh and Northern Irish administrations directly benefit employers.

With skills policy a devolved matter, Scotland, Wales and Northern Ireland receive a population-based share of the levy proceeds under the Treasury’s Barnett formula – to be invested as ministers see fit. This has led to big disparities across the UK in how beneficial the introduction of the levy has been to employers and the wider apprenticeship and training systems.

Plans 'thwarted' by Westminster

To encourage large employers to take on apprentices and help boost numbers, levy-paying businesses in England are given access to a digital account, allowing them to fund apprenticeship training to the value of their levy payment.

But while large businesses in all four UK nations pay the levy, only those in England benefit from these digital accounts.

Scotland’s further education minister said its plans to let employers benefit further were thwarted by Westminster, with Scottish policy makers unable to obtain information from Westminster colleagues on which Scottish employers paid the apprenticeship levy. According to government estimates, there are in the region of 4,000 levy paying employers in Scotland.

'Employment tax'

The Welsh government delivers its apprenticeship programme through the Welsh apprenticeship provider network and currently does not offer anything similar to the digital accounts system in England. A Welsh government spokesman said the devolved administration viewed the apprenticeship levy as “a UK government imposed employment tax” that “completely overlooks and undermines our very distinctive approach to supporting apprenticeships”.

He added: “Its introduction has come at a considerable cost to Wales and any Barnett consequentials we have received from the levy have been largely offset by cuts made elsewhere, meaning there is no significant new money coming to Wales.”

Like Scotland and Wales, Northern Ireland has a distinct apprenticeship and training system. The devolved administration stressed that cuts to the overall funding they receive from Westminster had offset much of the funding received as a consequence of the levy.

A difficult start

Since last April, employers across the UK with a payroll of more than £3 million have been required to pay the levy, which ministers hope will raise £3 billion annually by 2020 and lead to 3 million apprenticeship starts by 2020.

The Treasury estimates that 2 per cent of UK employers pay the levy. But from its inception, the levy has been the subject of much controversy. It has yet to lead to the desired increase in the number of people starting apprenticeships – in fact, numbers dropped dramatically in the months after the levy was introduced.

This is an edited version of an article in the 2 February edition of Tes. Subscribers can read the full story here. To subscribe, click here. To download the digital edition, Android users can click here and iOS users can click here. Tes magazine is available at all good newsagents

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