Wales politics

Apprenticeship levy impact 'confusing' to Welsh firms

Apprentices with drill bits Image copyright Thinkstock

Businesses in Wales remain "uncertain" about the impact of a new tax to fund apprenticeships, a Welsh Assembly committee has said.

About 700 Welsh employers will be affected when the UK-wide levy is introduced on 6 April.

An assembly committee said Welsh Government engagement about the charge had been "patchy" and employers were confused.

The Welsh Government said it was helping to "minimise" its impact.

All employers with a wage bill of more than £3m a year will pay a 0.5% levy towards the apprenticeship scheme in England.

The UK government has said Wales will get around £130m a year from its share of the levy, but Welsh Ministers have disputed this.

A report published by the assembly's Economy Committee on Wednesday said the tax had "considerable implications" for devolved areas and had been introduced without the assembly being consulted.

Committee chairman Russell George said businesses still had concerns about the introduction of the levy next week and ministers "must re-double efforts" to clear things up.

Image copyright Getty Images
Image caption The Welsh Government claims it will spend more on apprenticeships than it will receive from the levy

"While the Welsh Government published detailed new documentation immediately prior to giving evidence to the Committee, engagement with employers over the last year has been patchy and employers still have questions about what they'll get for their money," he said.

The Conservative AM repeated calls for the UK government to ask the assembly's permission before imposing charges devolved in Wales.

The report makes 13 recommendations to the Welsh Government, including lobbying the UK government to make sure schools are not adversely affected by the change.

The Welsh Government has pledged to create at least 100,000 high quality all-age apprenticeships over the next five years.

'Different approach'

A spokesman said the apprenticeship levy "directly conflicts with areas of devolved responsibility" and overlooked its own approach in Wales.

"To help minimise its impact on employers and learners the Welsh Government is taking a different approach to its counterparts in England - one which is better aligned to and supports the growing needs, of Wales, its people and economy," he said.

"We will consider the recommendations of this report in detail and respond formally in due course."

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