How to fix the levy is a taxing question

2nd February 2018 at 00:00
The apprenticeship levy isn’t working under the UK’s devolved governments. What’s the solution? Let’s call it a tax and give the wider training system the funding boost it badly needs

Living in Scotland, few issues are as constant a part of the public debate as devolution. Is anything short of full independence any use at all? Can a system where one administration has power over one policy, but isn’t able to influence other policies connected to or affected by that, be more than a token gesture?

The apprenticeship levy is an excellent example of the challenges such a system creates. Introduced by Westminster, it is now paid by large employers across the UK. The idea, of course, is that in return for paying the levy, these businesses get access to a digital account, allowing them to invest in apprenticeships and helping the government to achieve its aim of 3 million apprenticeship starts by 2020. However, that isn’t actually how it works. Or rather, that isn’t how it works outside England. This week, we highlight how the levy works for businesses in Scotland, Wales and Northern Ireland, and how they see little benefit.

Evolution since devolution

It is impossible to miss the political sensitivities here. UK policies run the risk of being seen as something “imposed” by Westminster, without consultation. Even if the way the English digital accounts system operates had suited Scotland, what were the chances that the Scottish authorities would have simply acknowledged this as a good idea and rolled it out in the same way?

The flipside is that the education and skills systems have evolved since devolution and, as a result, new initiatives from London are unlikely to be a fit for all four systems. And it’s not as if it’s even working well in England: apprenticeship take-up is down and companies aren’t spending what’s available to them. So what now?

Maybe the easiest solution would be to cut out the window-dressing: let’s call the levy a tax. This is how it is viewed by many employers, and such a change would remove the idea that employers deserve a direct benefit in return, while the wider training system would receive a boost in funding that it desperately needs.

It would also give all four nations the freedom to continue to develop their systems as they see fit.

@JBelgutay

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