8. What assessment has the Minister made of the impact that the apprenticeship levy will have on the block grant? OAQ(5)0058(FLG)

The apprenticeship levy is a UK Government employment tax that directly conflicts with areas of devolved competence. It does not provide significant new money for Wales. Any positive consequentials as a result of it are largely offset by negative consequentials and the additional costs to public sector providers.

Thank you for that answer, Cabinet Secretary. It is worrying to see that, in fact, what we are getting from the UK central Government is being taken away in another part, but also we are funding our public bodies and they have to put that money back to the Treasury under the apprenticeship levy. Can you give guarantees that the money will be used for apprenticeships? There are many bodies I’ve met with that happen to pay this levy and therefore feel that they’re being penalised for actually trying to take on apprentices but are not getting anything back. In England I know there’s a voucher system, but here we seem to have nothing.

Let me provide the figures for Members to see. It takes me back to almost the very first question I was asked by Andrew R.T. Davies when I said that the small print in all of this is important. So, in the spending review settlement, the Treasury announced that there was to be £114 million added to the Welsh block grant as a result of the apprenticeship levy. Had you read further down the page into the small print, you would have discovered that, at the same time, £90 million was being taken out of the block grant because of a reduction in English apprenticeship programmes. If you had read further down the page again, you would have discovered that Welsh public sector bodies were being required to pay in £30 million to the apprenticeship levy scheme. So, we were being given £114 million and £120 million was being taken away. That’s why, on days like today, it’s important to wait to see the whole story before making any spending commitments.

As a result of combined pressure from all devolved administrations, the Treasury announced within the last week or so a change to the basis of calculation of the apprenticeship levy, which will provide and extra £13.7 million for Wales next year. I will be in discussions with Cabinet colleagues as to how that money can be invested. But any idea that there are millions and millions of pounds coming to Wales through the apprenticeship levy is simply a fiction.