A Welsh Assembly Committee is warning that new taxes in devolved areas must have consent from the devolved institutions.
The recommendation is one of thirteen in the Economy, Infrastructure and Skills Committee’s report on the Apprenticeship Levy – a UK government charge on large employers which comes in to force next week.
Committee chair Russell George AM said:
“The introduction on 6 April 2017 of a UK-wide Levy has raised a number of issues relating to this important area of public policy.
“It is a cause for concern that the UK Government has introduced this Levy with considerable implications for an area of devolved responsibility, without first consulting the devolved institutions. There should be no more new taxes in devolved areas without Welsh consent.
“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.”
Mr George added that the Levy had raised the profile of apprenticeships:
“Our report looked at the implications of the Levy for Welsh employers. It is clear that the Levy has succeeded in raising the profile of apprenticeships, particularly for organisations that have not previously considered that model for developing its workforce.
“We heard about the confusion and uncertainty that has surrounded the Levy – particularly in the early days, although we note that during our inquiry, the Welsh Government published its document – ‘Aligning the Apprenticeship model to the needs of the Welsh economy’ and a toolkit for employers, which fills many of the communication and information gaps that our inquiry identified.”
The Committee’ report highlights the concerns of private sector employers who have questioned what return they’ll get for their money.
While the Welsh Government has attempted to answer these questions (publishing detailed documentation prior to giving evidence to the Committee), it remains to be seen how effective this will be.
The Committee also notes that the different and diverging apprenticeship pathways in each of the nations of the UK means that ensuring qualifications are valued and understood across borders will be crucial for individual apprentices.
Mr George added:
“Given the uncertainty – both for businesses and between governments – that surrounded and continues to surround the introduction of the levy, the Committee will look again at this issue in 12 months’ time to assess what impact it has had.”
The Committee makes 13 recommendations in its report, including:
- The Minister must re-double the efforts of the Welsh Government to ensure that all Levy-paying employers in Wales have the information they need during the Levy’s introductory period;
- That a period of stabilisation and certainty is required for the sector in Wales. The Minister should continue to engage with the employers from all sectors in the months ahead and should set out how she intends to do this in her response;
- That any future levies in areas of devolved competence should not be introduced without the consent of the National Assembly for Wales and urges the Welsh Government to raise this with counterparts in the UK Government;
- That the Welsh Government set out how it intends to ensure that all employers (including those in non-priority sectors who are making Levy payments) are made aware of the opportunities to overcome the issues of ‘no direct return’ via the Welsh model of apprenticeship delivery; and
- That the Minister lobby the UK Government to ensure that the number of people employed by local authorities in schools are not included in the overall local authority employee headcount for the purpose of calculating the Levy. This will adversely impact on schools budgets in Wales and is at odds with the treatment of Academy schools in England.