Our response to a further technical consultation on the apprenticeship levy

Information on the reclaim mechanism for employers in the devolved nations sought.

We have no comment on the actual draft regulations for the apprenticeship levy but have serious concerns about one important related administrative aspect of the levy: the reclaim mechanism for employers based outside England.  How employers in the devolved nations are able to access the money they have paid into the levy scheme remains unknown:

  • the Welsh government has confirmed that it will not be using the digital account system for payments to employers that will be used in England.  But we do not know if Wales will introduce a different system or what it will be.
  • less than half of Scotland’s £221 million share of the UK (£93.5 million) will be used for apprenticeships.   And full details of Scotland’s flexible workforce development fund will only be available in autumn 2017.  But there has been no indication to date that employers will be able to reclaim their apprenticeship levy monies as they can in England.
  • the Department of the Economy in Northern Ireland issued a short consultation at the end of 2016 but again focused more on workforce training needs than on an employer reclaim mechanism.

Building societies – and indeed other employers - who have mobile or offshore workers spanning UK national borders need clarity.  Final information on the distribution of levy funds and the eligibility of cross-border workers is vital to ensure that, for example, English residents working in Scotland or English-based employees who commute to Wales are able to benefit from increased apprenticeship opportunities.   Otherwise, the levy is in danger of becoming a postcode lottery – or worse, just another payroll tax.