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Big business fears after Welsh Government gives no guarantee over UK apprenticeship levy consequential

The Welsh Government will give no guarantees that big businesses in Wales will benefit from the UK Government’s apprenticeships levy, prompting fears that it will discourage larger employers from operating in Wales.

In spring 2017, UK employers with a pay bill over £3m will be required to contribute to a new apprenticeship levy. Changes to how apprenticeship training is funded will also be ushered in.

Many businesses regard the 0.5% levy as an important step in addressing skills shortages and a way of broadening young people’s routes into decent careers. Once businesses have declared the levy to HMRC they will be able to access funding for apprenticeships through a digital apprenticeship service account.

But a Written Assembly Question (WAQ) submitted by the Welsh Conservatives has revealed that Welsh Government does not plan to invest the extra cash - which it receives from the Treasury as a consequential of this levy – to support the funding of apprenticeships.

The Cabinet Secretary for Finance and Local Government, Mark Drakeford AM, responded to a question from Darren Millar AM by saying that:

Funding provided to Wales is not ring-fenced for specific purposes and is allocated through Welsh Government budgets in line with the Welsh Government’s strategic priorities.” 

The lack of commitment to invest this cash into apprenticeship schemes will come as a big blow to businesses in Wales, many of whom deliver costly training schemes and already find it difficult to recruit staff equipped with the right skills and training.

According to a CBI report, 72.5% of business said that they experience difficulty recruiting the right staff in 2015.

Responding to the news, Welsh Conservative Shadow Secretary for Education, Darren Millar AM, said:

“The lack of commitment to reinvest this extra cash into training gives an incentive for big businesses to take jobs out of Wales and will discourage investors from bringing new jobs to Wales. 

“Large employers will feel cheated by the Welsh Labour-led Government if it refuses to invest this cash into training and apprenticeships in Wales. 

“If the Labour-led Welsh Government is serious about meeting its 100,000 apprenticeship target and growing the economy, then it must give the business community some urgent reassurances as to the likely support they can expect over the next five years as a result of the Apprenticeship Levy."