Brexit could kill-off apprenticeship levy plans, Boles warns

Brexit could kill-off apprenticeship levy plans, Boles warns

Skills Minister Nick Boles has reportedly warned that Brexit could put an end to the apprenticeship levy.

He spoke out on the issue during a recent event in Westminster, organised by Policy Exchange.

A spokesperson for the think tank told FE Week today that Mr Boles had raised concern about prospects for the levy — during a speech he delivered on the European Union and possible ramifications if the British public votes to leave, through the referendum on June 23.

He was reported, in City AM, as asking: “Do you think the chancellor will feel it is prudent to introduce a new payroll tax in the middle of a recession, when business confidence has been knocked by a decision to leave the single market and unemployment is rising?

“Like all public services, funding for apprenticeships, and other support for young people, depends on the economy being strong and businesses being profitable.”

The levy plans, first announced by the government last July and set for launch in April 2017, are currently being developed by the government.

It is set at 0.5 per cent of an employer’s paybill, and will only be payable by businesses with a paybill of more than £3m will pay – around two per cent of employers.

But Mr Boles reportedly indicated that the programme could still be dropped in the event of a Brexit vote.

It comes after Professor Alison Wolf, who made the case for an employer levy to fund apprenticeship training in a report published days before the government first unveiled plans for the charge, told MPs last week she thought it was “very odd” only large employers would pay the levy.

“If you’re going to have a proper apprenticeship system, and one that’s attractive to young people, you’ve got to get small and medium employers involved,” she said to the Commons sub-committee on education, skills and the economy on June 8.

The Office for Budget Responsibility (OBR) predicted in November that the levy would raise £3bn in 2019/20, but this was subsequently revised down in March to £2.9bn.

The money raised is set to be ring-fenced, so it can only be spent on training apprentices and all levy-paying companies will receive a 10 per cent top up on monthly levy contributions.