Scotland to spend less than half their levy funding on apprenticeships

Scotland to spend less than half their levy funding on apprenticeships

The Scottish government has announced that its use of the apprenticeships levy will be more flexible than in England, funding a “range of employment measures”.

Less than half of Scotland’s estimated £221m levy funding in 2017-18 will be used for apprenticeships, with the rest to be spent on a range of workforce development and pre-employment support programmes.

In contrast, the share of the levy funding for England, which will reach close to £2.5bn by 2019-20, is all ring-fenced for funding apprentices employees working for the majority of their time in England.

This broader approach from the Scottish government may frustrate employers in England.

Carolyn Fairbairn, director-general of the Confederation of British Industry, expressed concerns about this restricted use of the funds in a speech on April 28, saying: “When it comes to training – business knows best.  

“They should have the flexibility to choose the kind of training which is right for them, whether it’s labelled an ‘apprenticeship’ or not.

“Other levy systems in Ireland, Germany, Denmark, France and Quebec, give greater flexibility on spend than the UK Government is proposing. So it can be done – and this is how our levy should work too.”

The apprenticeship levy will come into play in April 2017, meaning larger employers pay 0.5 per cent of their annual wage bill above £3m directly to the HMRC.

A spokesperson for the Association of Employment and Learning Providers questioned the strategy, saying: “We have to recognise that the Scottish government’s decision not to ring-fence its share of the levy for apprenticeships only has been taken after a consultation, although we are aware that there are employers north of the border who aren’t happy about this. 

“It surely wouldn’t be in the Scottish economy’s interests if these employers started shifting their apprenticeship training into England as some are warning.”

Commenting on Scotland’s approach, Jamie Hepburn MSP, minister for employability and training, said: “We will use the apprenticeship levy to give the workplace more options and flexibility.

“While we will boost modern apprenticeships we will also address skills gaps and the training needs of existing employees where a full apprenticeship might not be appropriate.”

He added: “We have responded to the needs of employers by announcing an approach that is much broader than is currently proposed in England, and that will support skills, training and employment.”

In guidance released in August, the Welsh government proposed a similar approach to the Scottish use of the apprenticeship levy, though said the decision was a work in progress.

 The document stated: “We are working with the UK Government and the other devolved administrations to resolve a range of cross border issues.   

“We recognise that there is a need to maintain flexibility to enable employers to choose whatever training is best for their business.

“The issues are complex and need to be properly considered. They are likely to take some time to progress.”

Here’s how Scotland plan to spend their levy:

scotland-levy-table-1