Bad news for the government’s plans to roll out the Apprentice Levy next year. Following the publication of budgets generated by the levy, members of two of the UK’s devolved assemblies have rejected the scheme, claiming it is unworkable and will deliver few benefits to companies and employees in their regions.
The Welsh Assembly heard from Labour Skills minister Julie James this week claim that the levy will bring no new money to the principality.
Assembly members were putting questions to James earlier this week about the possible funding arrangements for the Levy and heard the minister’s blunt assessment of the situation. “The figures that have been released by the UK Treasury do not mean significant new money is coming to Wales,” she said.
“They do not take into account reductions made to comparable English programmes, including apprenticeships, and need to be considered as part of the bigger picture, which shows – you’ll not be surprised to learn – real terms cuts to the funding available to Wales over the next few years. Nor do they show the effect of some £30m which will be paid back to the Treasury by Welsh public service providers through the levy.”
‘Nothing more than an employment tax’
Ms James added: “The levy is nothing more than a UK government employment tax which directly conflicts with areas of devolved competence.
“We have our own distinct and very popular approach to apprenticeships … and this just cuts directly across it. Not only do we not have any new money, but clearly all our public services have to pay the levy and so they’re deprived of funds.
“It makes no sense at all and we’re very cross about it.”
Meanwhile members of the Northern Ireland assembly have heard similar criticisms from the finance minister in Belfast, who told parliament, the levy “is of no benefit to our budget”.
‘No overall increase to the budget’
Simon Hamilton explained that, “Next year the apprenticeship levy gives the Executive a Barnett consequential of £76m. However, the cessation of funding for existing apprenticeships in England means a Barnett consequential loss of £52m. There is also a £29m levy on our public sector. This means there is no overall increase to the Executive’s budget.”
The minister’s sentiment was echoed by Stephen Kelly, the head of Manufacturing NI, who said the levy was “not welcome”.
“It has not been asked for by business nor indeed the Northern Ireland Executive and as such its introduction is not welcome,” he told local media.