How will Scotland spend their apprenticeship levy?
Things are done differently in Scotland – including the apprenticeship reforms.
At the end of last year, the Scottish government announced that it would be taking a more flexible approach to the apprenticeship levy, allowing businesses to spend their levy funds on a wide range of vocational training.
The apprenticeship levy comes into play in April 2017, meaning large employers will pay 0.5% of their annual wage bill to HMRC to spend exclusively on apprenticeship training. As the UK government imposed this legislation on Scotland without consultation, the Scottish government has decided to relax the rules for employers across Scotland.
Less than half of Scotland's estimated £221 million of annual levy funding will be used for apprenticeships, as Scottish employers will be able to spend their levy on a range of workforce development programmes.
The Scottish apprenticeship levy will be used to:
- Create a new £10 million Workplace Development Fund
- Meet the Scottish Government's target of 30,000 new apprenticeship starts by 2020
- Increase the number of graduate-level and foundation apprenticeships
- Create strong partnerships between employers, local authorities and the third sector to tackle unemployment
- Support skills development in the digital, care and early years sectors
- Deliver employment-focused college training for young people
This is great news for Scottish employers who will now have the flexibility to invest in the type of training that's right for their business. It's also good news for the local economy, as it will reduce the amount of apprenticeship training outsourced to English training providers.
How will this affect employers in England?
English employers may be frustrated that they don't have the same flexibility as Scottish employers.
There are examples of other levy systems across the world – in Ireland, Germany, France, Denmark and Quebec – that already offer greater flexibility than the UK Government. Many English employers have argued that they should have control over how they spend their levy contributions, as training requirements differ on a business-by-business basis.
However, the new apprenticeship standards are designed to solve this issue. The new standards are written by employer-led groups in each industry, giving businesses more control over the content of each specific qualification.
Apprenticeships in England are also expanding to include higher and degree-level qualifications.
At OneFile, we understand these legislative changes can be hard to get your head around - especially when there are different rules north and south of the border! So to help you understand how England and Scotland are handling the apprenticeship reforms differently, download our infographic.