Welsh Government – Q&A UK Government’s Apprenticeship Levy

1. What is the Apprenticeship Levy? Will it be collected in Wales?

The Apprenticeship levy is a UK Government employment tax that is due to come into force in April 2017. It is being introduced in the 2016 Finance Bill. It will be collected across the whole of the UK. All employers (public, private and third sector) with a pay bill of more than £3 million each year will pay the levy. The levy rate is 0.5% of pay bill; there is an allowance of £15,000 per year. The levy is paid to HM Revenue and Customs through the PAYE process. Examples of payment calculations together with other technical information (on matters such as what constitutes a pay bill, definitions of an employer, interaction with industry levy schemes and rules for connected companies) can be found at https://www.gov.uk/government/publications/apprenticeship-levy-how-it-willwork/apprenticeship-levy-how-it-will-work. Specific questions for the UK Government can be asked via apprenticeships.levy@bis.gsi.gov.uk or by calling 08000 150 600.

2. Will the levy go ahead in light of the Referendum on the European Union?

We understand from the UK Government that they are continuing with their plans to implement the levy. This is entirely a matter for the UK Government.

3. How will the levy money come to Wales?

The overall allocation that Welsh Government receives from the UK Government is arrived at through the Barnett formula which calculates the Wales ‘share’ of changes to Departmental budgets in Whitehall. Whilst at the 2015 UK Spending Review the UK Government allocated resources to Whitehall Departments to cover programmes financed by the Apprenticeship Levy, these additions were offset by cuts to other programmes, including existing apprenticeship programmes. In aggregate, the UK Government’s Spending Review 2015 means that the Welsh Government’s budget will continue to reduce in real terms over the coming years. Funding provided to Wales is not ring-fenced. A fundamental principle of devolution is that Welsh Ministers allocate resources in their Budget according to Welsh priorities, as approved by the Assembly. The Welsh Government will not know how much employers in Wales have paid to HM Revenue and Customs.

4. What impact will the levy have on provision in Wales?

The Welsh Government is working with the UK Government to understand the impact of the introduction of the levy in Wales, in particular impact on our funding settlement. The levy will raise awareness and demand for apprenticeships and workforce development more broadly from levy payers. We anticipate that around 2% of UK employers will pay the levy. Even though some aspects remain unclear there is still a need for Welsh Government to plan provision and deliver on its priorities.

5. Will a digital voucher system operate in Wales in the same way as England?

The Welsh Government has no plans to introduce a digital voucher system. We have seen no evidence that a voucher system would improve quality within the system. It would though introduce bureaucracy for employers and uncertainties as to how non levy employers would be supported. There have also been difficulties in the past with education and training vouchers systems in the UK. Many employers and employer bodies have criticised the system being proposed in England.

6. As an Employer how can I get my money back?

Employers don’t need to wait until the levy is introduced to benefit from our apprenticeship programme. Our apprenticeship programme is open to all employers with funding prioritised to meeting the economic needs of Wales.

7. Why is the apprenticeship system different in Wales?

Skills, including apprenticeships, is a matter devolved to the Welsh Government. The Welsh Government has developed its apprenticeship system to meet the needs and priorities of Wales. Wales has a focus on quality to ensure value for money. Apprenticeship delivery and funding is prioritised based on the needs of the economy and employers. For example, we have established Regional Skills Partnerships to engage with employers and provide us with intelligence on skills needs and gaps. We prioritise our provision in line with evidenced need. More information, including contact details can be found under question 15.

8. How are apprenticeships delivered in Wales?

Apprenticeships are delivered and administered though a procured network of quality assured training providers. The provision we commission each year is based on both intelligence from Regional Skills Partnerships and information directly gained from employers. For example, last year we consulted with employers formally on our investment priorities for apprenticeships.

9. What are the priorities for apprenticeship delivery?

The Welsh Government’s priorities are: o Delivering our commitment for a minimum of 100,000 quality all age apprenticeships – enabling many more employers to get involved. o Increasing the number of higher apprenticeships and piloting degree apprenticeships particularly in science, technology, engineering and professional routes – to better meet the needs of the economy.

o Improving apprenticeship credibility and integration into the education system to get more school leavers(16- 19) to join the programme.

o Revising systems to develop framework learning content – to be more responsive to often rapidly changing employer needs.

o Developing opportunities, such as the Regional Skills Partnerships to enable all stakeholders to work together to create a stronger sustainable intelligence led system.

o Maintaining completion rates at over 80% and introducing additional measures of quality such as destination data which will look at future earnings and other benefits.

10.Can vouchers in my England Account be used in Wales?

We are working with the UK Government to consider this. It is unlikely monies that have been allocated, in the form of vouchers in England will be redeemable directly in Wales. However, matters are complex and we would welcome discussions with individual employers to better understand particular issues.

11.What will be the impact on companies that already deliver their own training?

In Wales there will be no impact. Employers can of course continue to invest in training as they wish. 4 12.How will the levy impact on employers with a cross border workforce? We are working with the UK Government and the other devolved administrations to resolve a range of cross border issues. We recognise that there is a need to maintain flexibility to enable employers to choose whatever training is best for their business. The issues are complex and need to be properly considered. They are likely to take some time to progress.

13.How can I get involved in the apprenticeship system in Wales?

Any employer wanting to benefit from Wales’ apprenticeship system can contact one of our procured providers directly via http://gov.wales/topics/educationandskills/skillsandtraining/apprenticeships.

14.What is the Skills Gateway?

The Skills Gateway delivers an engagement, assessment and referral system that provides a seamless service for businesses and individuals seeking skills support in Wales. It underpins the delivery of, and provides the access point to, the wider integrated portfolio of employment and skills provision in Wales. The Skills Gateway is aimed at employers who are looking to recruit to and/or upskill their existing workforce and individuals who are unemployed, work ready and wish to enhance their employment prospects. The Skills Gateway can be accessed through: The internet www.Business.Wales.gov.uk and www.careerswales.com Telephone via Business Wales (03000 603 000) and Careers Wales (0800 0284844)

15.How can I engage with the Regional Skills Partnerships?

Regional skills delivery is a key policy focus going forward and is part of a growing agenda set against a context of a strengthened UK Government-driven, regionally focused skills landscape, involving Enterprise Zones, City Region deals and Growth Bids.  In Wales, the ambition is to stimulate employment and skills activity by encouraging skills providers to link their delivery and funding plans to opportunities created by strategic investments and business growth in their regions. The three Regional Skills Partnerships (RSPs) in North, South West and Mid and South East Wales are well established, with recognised structures and productive relationships across employers and key stakeholders within their respective regions.

The Regional Skills Partnerships are:

 North Wales Economic Ambition Board Contact Iwan Thomas Iwan.thomas@dataunitwales.gov.uk or www.northwaleseab.co.uk

 South East Wales Learning, Skills & Innovation Partnership Contact Karen Higgins Karen.higgens@wlga.gov.uk or www.lskip.wales

 South West & Mid Wales Regional Learning Skills Partnership Contact Jane Lewis jelewis@carmarthenshire.gov.uk or www.rlpsww.org.uk

 August 2016

29 September 2016

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