The Scottish oil and gas industry is calling for immediate confirmation from the Scot-Govt. that the £230 million due to be raised from the new Apprenticeship Levy be used for skills and training resources in Scotland.
The last UK government announced the new Apprenticeship Levy, which comes into effect from 1 April 2017.
All employers in the UK with an annual pay bill of over £3 million will have to contribute to the apprenticeship levy at a rate of 0.5% of their payroll.
The UK Government estimates that the levy will raise £3 billion annually over the first five years. It will be collected by the Inland Revenue which will hand over a pro capita share to the Scottish Government.
As the policy is devolved OPITO – the industry skills training body – has asked the Scottish Government for clarity on how the money from the new tax will be redistributed, on how companies will be allowed to invest the revenues, the type of training which will be included and whether they will be able to transfer the entirety of their own levy funds to other companies
OPITO is concerned that no decision has been made by the Scottish Government on this, despite the UK Government confirming the amount the Scottish Government will receive and clarifying how the money will be spent in England.
An OPITO spokeswoman said: “The apprenticeship levy is essentially a new skills tax to be collected from employers and we are seeking assurance that the money raised will be ring-fenced for new learning and training infrastructure and initiatives – and not off-set to fund existing programmes or other Government supported schemes which are already in place.
“Around £230 million will be raised annually in Scotland by the Apprenticeship Levy. This must be funnelled into programmes that are going to add legitimate value to skills development in the oil and gas workforce.
“Equally, we need a simple, straight-forward system for employers to access the funds so they can invest them in the right programmes that will get the results both industry and Government want to see.”
A delegation of oil and gas industry bodies met with Jamie Hepburn, the Employability and Training Minister, and Scottish Energy Minister Paul Wheelhouse to discuss how the Scot-Govt intends to spend this payroll tax windfall – but have not received any significant reply.
The spokeswoman added: “With less than 2% of companies across the UK liable for this levy, the size of companies in oil and gas means that our industry is likely to be disproportionately affected by its introduction.
“In the current and very challenging climate for the oil and gas industry, we have always maintained that this is the wrong tax, coming at the wrong time. However, it will come into force next Spring and employers rightly need to know what’s happening.
A spokesman for the Aberdeen-based Subsea UK trade association added: “We really need to hold the Scottish Government to account on this. They’ve had plenty of time to consider this issue and they can’t just fall back on blaming Westminster.
“Along with other industry bodies, we must make the Scottish Government fully aware of the urgency of the situation and the consequences of it not being resolved quickly.”
“The Scot-Govt. needs to tell employers how this will be managed so that companies can plan their budgets accordingly.
“Our members, some of whom are among the largest subsea engineering companies in the North Sea, are frustrated and very concerned about the impact this new levy will have on their business.”