The Federation of Master Builders Scotland (FMB Scotland) has welcomed the “long-overdue” confirmation of funding the Scottish Government will receive from the new Apprenticeship Levy and called on ministers to commit to ring-fencing the funds.
The UK government has said that Scotland will get around £230 million a year from its share of the levy, being introduced in April.
All employers with an annual wage bill of more than £3m will pay a levy of 0.5 per cent of the total, however, each group of companies receive a levy allowance of £15,000 per year to offset the levy payable figure.
As apprenticeships are a devolved policy, each of the UK nations manages its own apprenticeship programmes and Gordon Nelson, director of FMB Scotland, has now urged Scottish ministers to outline their plans for the levy and warned against using the funds to “plug holes” elsewhere in the Scottish budget.
He said: “We welcome the long-overdue confirmation from Westminster regarding how much funding the Scottish Government will receive from its share of the new Apprenticeship Levy. We’re also encouraged by the fact that central government has guaranteed these funding levels even if the Apprenticeship Levy ends up raising less cash than anticipated – this provides welcome certainty for all concerned.
“While the frustrations felt by MSPs over the way they have been kept in the dark are understandable, they now have the clarity they need to start planning. It’s vital that they now offer the same degree of clarity to those industries awaiting a clear plan on how the levy will be invested and used to tackle critical skills shortages.”
Nelson added: “We would warn strongly against the temptation to use these funds as a means by which to plug holes elsewhere in the Scottish budget. To do so would be to waste a golden opportunity to tackle, in particular, the skills crisis in construction at its root. Instead, the Scottish Government should ring-fence every penny of the funding it will receive from the levy to be invested exclusively in training and apprenticeships.
“The prospect of the end to freedom of movement for EU citizens makes it imperative that the Scottish Government is more ambitious than ever with its apprenticeship targets, lest it risk exacerbating a skills shortfall that poses a serious threat to the future of a critical sector of our economy.”
The UK government has confirmed that Scotland will get £221m in the first year of the levy, rising to £230m in 2018-19 and £239m a year later.
The call for clarity on how Holyrood intends to administer the funding was echoed this monthby business and financial adviser Grant Thornton while earlier this year the Federation of Small Businesses (FSB) called for the funds to be spent on vocational skills academies.
In September, the Scottish Chambers of Commerce (SCC) said the introduction of the Apprenticeship Levy in Scotland should be postponed until April 2018 amid growing evidence that not enough businesses are prepared for the tax.