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UK Ministers' £391 million raid on Scotland

Published: 22 Sep 2015 10:00

No confirmation Scotland will get a penny from the Apprenticeship Levy.

Scotland is facing a £391 million per year Treasury raid on company and public sector payrolls, Cabinet Secretary for Fair Work Roseanna Cunningham revealed today with £146 million of this being taken from public services such as schools and hospitals each year.

Highlighting correspondence from UK Skills Minister Nick Boles, she revealed that the UK Government has now confirmed that the Apprenticeship Levy will apply to both businesses and the public sector.

Furthermore, she revealed that the UK Government has yet to agree that any revenue from the Levy – announced in the July Budget by Chancellor George Osborne, and intended to fund apprenticeship places – will come to Scotland.

Ms Cunningham revealed that the Scottish Government estimate – assuming a levy of 1 per cent of payroll and applying to organisations of more than 250 staff – will raise up to £391 million per year with £146 million of this coming from public sector budgets of Health Boards, local councils and other public services.

The Cabinet Secretary has now written to Mr Boles to insist that UK ministers commit to Scotland getting a fair share of the revenue raised through this levy. She said:

"It is now almost two months since the Chancellor announced the Apprenticeship Levy and we still don't know whether a single penny of the money raised in Scotland will come back to Scotland.

"The suspicion must be that Westminster have no intention to provide a fair share to Scotland and instead plan to cut the BIS budget as part of their austerity drive.

"That would rob Scotland of hundreds of millions of pounds, including up to £146 million per year from schools, hospitals and public services.

"Not only will this effectively be a stealth cut to Scotland's public services, but it would put this at real risk our ability to fund Scotland's distinct Modern Apprenticeship system.

"UK Ministers need to answer the simple question we have posed: are they going to give Scotland it's fair share of the levy or is this just another cut to our public services?"

Notes to editors

The Apprenticeship Levy was announced by Chancellor George Osborne in the budget on July 8, 2015. He announced "a levy on large employers to fund 3 million new, high quality apprenticeships this Parliament" [HMT 'Red Book', Page 3].

Department for Business, Innovation & Skills Minister, Nick Boles MP, confirmed in a letter to Cabinet Secretary Roseanna Cunningham that: "our expectation is that the levy will apply to larger employers, both public and private"

Scottish Government has estimated that, based on the standard definition of " larger employers" as those with more than 250 staff paying a 1 per cent levy on their payroll, the total revenue from Scotland would be:

  • Private Sector: £246 million
  • Public Sector: £146 million
  • Total: £391 million.