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Apprenticeship Levy: Benefits

Oral Answers to Questions — Employment and Learning – in the Northern Ireland Assembly at 2:30 pm on 19th January 2016.

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Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party 2:30 pm, 19th January 2016

T3. Mr A Maginness asked the Minister for Employment and Learning, given the apprenticeship levy that has been introduced by the British Government at Westminster, to clarify the actual benefit that there might be for industry and potential workers here in Northern Ireland. (AQT 3343/11-16)

Photo of Stephen Farry Stephen Farry Alliance

I thank the Member for his question. In the spirit of what you would term, "topical questions", that is extremely topical, given that I was in Dublin yesterday meeting my Scottish and Welsh counterparts to discuss the apprenticeship levy and how we are going to approach meetings with Nick Boles, the UK Skills Minister, in early February on the needs of the devolved regions to ensure that what comes forward works for our particular context. It is, indeed, somewhat ironic that the three of us went to Dublin to talk about such matters, but that seemed to be the most convenient location. We have some very deep concerns about what is being proposed and what has emerged to date. We do not think that it has been entirely thought through. Indeed, as with many decisions taken by UK Governments, particularly the current one, the interests of the devolved regions are often an afterthought. <BR/>In England they have a very clear agenda on the number of apprenticeships, and they have an artificial target of three million. They are essentially badging anything that is remotely associated with training as an apprenticeship. At least the three devolved regions have their own different apprenticeship strategies, which are much more clearly focused on quality and establishing brands. There are potential difficulties, in that a number of our local companies would end up bearing the levy at a rate in excess of their ability to train in conjunction with our local apprenticeship strategies and, indeed, our youth training strategy. That will create a source of tension. In turn, it is unclear how we are going to see support for SMEs, which will not pay the levy because they are too small to meet the criteria. It is also proposed that it be levied against the public sector, which will be an interesting challenge for all of us. At this stage, it is the intention of the three devolved regions to formulate a common position and to make representations, first, to the Department for Business, Innovation and Skills and, in due course, to encourage our respective Finance Ministers to have similar discussions with Her Majesty's Treasury to ensure that we can seek to ameliorate the worst aspects of the apprenticeship levy and that what is proposed works in the interests of devolution.

Photo of Roy Beggs Roy Beggs UUP

I remind the Minister of the two-minute rule.

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

I thank the Minister for a very interesting reply. It is one of the ironies of Anglo-Irish relationships that the meeting of the triple alliance took place in Dublin. Long may that continue, and long may the Minister continue to attend such meetings and encourage such a triple alliance.

The Minister pointed out the difficulties and the unintended consequences of the levy, particularly in the public sector, but there must be great added value with the levy. Will he outline how that might affect us here in a beneficial manner?

Photo of Stephen Farry Stephen Farry Alliance

In theory, the levy sounds like a good idea in that it adds value and is associated with training. The difficulty is that it is essentially coming across as a tax on business. A particular difficulty is that it will not be added value. It is likely that, on the back of the proceeds of the levy, the Treasury will cut the budget of the Department for Business, Innovation and Skills. That will see a negative Barnett consequential for Northern Ireland, alongside Scotland and Wales. You could argue that we will get the same amount of money back from the levy, but there will be significant administration fees, so a lot of resource will leak out of the system. We see something coming through that is complicated, of very little benefit, and it probably has potential costs. While it is important that we highlight the importance of investment in skills, what was a good idea on paper is turning out to be a bit of a nightmare. We will need to have a very difficult engagement with the UK Government on the issue.

That is not the only area where we see such difficulties. We have also seen difficulties in the higher education Green Paper, which is about suiting the interests of higher education in England and goes off on a tangent from the direction of travel in the three devolved regions. There are also other knock-on implications for us.