Scotland won’t ring-fence apprenticeship levy funds

The Scottish Government will not ring-fence funds from the apprenticeship levy, prompting frustration from the oil and gas industry. From April 2017, UK employers with an annual pay-bill of more than £3 million will have […]

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By Jonny Bairstow

The Scottish Government will not ring-fence funds from the apprenticeship levy, prompting frustration from the oil and gas industry.

From April 2017, UK employers with an annual pay-bill of more than £3 million will have to contribute to the levy at a rate of 0.5%.

This is expected to raise £3 billion as a commitment to increasing internships over five years.

Jamie Hepburn MSP, Minister for Employability and Training, confirmed that the £221 million the Scottish Government is set to receive from the UK Government will not be set aside solely to support workforce development, as the oil and gas industry have repeatedly called for.

Instead it may be used in other areas of the economy.

Oil and gas skills organisation OPITO says the industry will be disproportionately affected and that being taxed without necessarily receiving any benefit in return will be a severe blow for employers.

OPITO UK Managing Director John McDonald said: “We have long argued however that the Levy was an additional tax being imposed on employers at a time when oil and gas companies are already struggling to manage costs and thousands of jobs have been lost across the sector.

“By refusing to ring-fence the funding, the Scottish Government has given itself an additional pot of cash it can use to plug holes elsewhere in the Scottish budget rather than for its intended purpose of adding legitimate value to skills development in the national workforce.”