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.

 

 



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4 Comments

  1. FE Lecturer

    What will the next Brexit scare story be?
    Plague? Tsunami? World war 3? Alien invasion?
    The establishment are very afraid that the people might decide to take control of their future.
    .
    “People shouldn’t be afraid of their government. Governments should be afraid of their people.”

    • Rudy Dudy

      I must admit, I think the PM has played this completely wrong. He should have been impartial, guiding us on both sides of the argument rather than running his fear campaign.

      I think he has forced more people towards brexit. Will be interesting to see what happens either way.

  2. Mark Corden

    Interesting line for Mr Boles to take. I would have thought that if BREXIT receives a YES vote next week, part of the impact over the next couple of years would be a reduction in volume of skilled labour from overseas that we currently see. Would a reduction in volume of economic migrants not support the need to invest in developing the skills of those within the home nations?

    As for recession and profitability, the Levy is currently a ring fenced tax to be invested back into skills development through Apprenticeships – it’s not in the mix of the other department spending that are referenced in his comments.

    Skilled labour is a major contributor to business performance and profitability (as the governments productivity and Apprenticeship plans tell us), so if the Levy is kicked into touch (we already know that there are no other funds for Apprenticeships) are we effectively hampering businesses being able to trade out of a recession?

    I’m not an economist, so it could be I just don’t ‘get it’.