Scotland business

Jobs warning over apprenticeship levy

Oil installation Image copyright Thinkstock

Subsea industry leaders have criticised a decision by the Scottish government not to ring-fence funds raised from the new Apprenticeship Levy.

From April, employers with a wage bill of more than £3m a year will pay 0.5% on payrolls to fund apprenticeships.

Subsea UK said plans to give public sector employers equal access to the funds could cost jobs rather than create them.

Ministers said the move had followed consultation with employers.

The new levy, announced in the UK government's Autumn Statement in November 2015, aims to raise £3bn a year for apprenticeships across the UK.

Scotland's share of the levy under a funding formula for devolved administrations will be £221m next year.

Subsea UK chief executive Neil Gordon said the money raised should be invested in new and improved training and initiatives "to stimulate the desired increase in apprenticeships and not off-set to fund existing programmes".

He also warned that businesses would simply see the new tax as a bottom line cost which could have an impact on existing jobs, given the "fragile state of the oil and gas sector and continuing pressure on costs".

Image copyright Thinkstock
Image caption The Scottish government says all the funds raised through the levy will be used to support skills, training and routes into employment

Mr Gordon said: "This levy is designed to create opportunities for employment through training and development.

"For our industry to achieve a real step-change in the number and quality of apprentices, we need to ensure that the training and delivery mechanism will support the development of the right type of apprenticeships to meet the needs of the oil and gas industry now and in the future."

He added: "The Scottish government has obviously not listened to industry."

Scotland's Employability and Training Minister Jamie Hepburn said all of the funds raised through the levy would be used to support skills, training and routes into employment.

He also highlighted that funding for apprenticeships and wider skills would be set out as part of the overall Scottish budget on 15 December.

'Employers consulted'

Mr Hepburn said: "While the levy settlement forms part of the Scottish block grant, its proceeds will largely be replacing existing apprenticeship funding.

"This means that the £221m is not additional funding but largely replaces existing UK expenditure through the new tax.

"We understand that for employers, paying this levy is new and they want to see how those funds are being used.

"We have consulted with employers and are using the findings from that and wider discussions to finalise our response to the introduction of the levy in Scotland."

The Scottish Conservatives said the SNP had "blown a golden opportunity to invest in Scotland's future workforce" by failing to ring-fence levy funds.

Leader Ruth Davidson said: "The Scottish Conservatives have been clear that every penny of this funding should be spent on developing a skilled workforce to help boost our economy.

"I said last month that Scotland could become the skills capital of Europe, but instead we will miss the opportunity to make a real difference unless the SNP performs a very quick U-turn."

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