26 November 2015

Chancellor Outlines Apprenticeship Levy Details in Spending Review

As part of the Comprehensive Spending Review on 25 November 2015, the Government provided further information on plans to introduce an Apprenticeship Levy. The Chancellor announced that the new levy, which will take effect in April 2017, would be set at 0.5% of an employer’s wage bill and would be collected monthly through the PAYE system.

Each employer will receive an allowance of £15,000 to offset against their levy payment. In practice, this means that the levy will only be paid by businesses whose annual wage bills are in excess of £3 million. Smaller employers which will not pay the levy will continue to be able to access Government support for apprenticeships.

A priority for Build UK members, as identified in Build UK’s comprehensive response to the Apprenticeship Levy consultation earlier this year, is the implications of the new levy on the existing CITB Levy and Grants Scheme. Whilst no announcements have been made, the Government acknowledged that responses to the consultation had shown that “industries that already contribute to an existing levy system do not wish to contribute to two levies at once” and it will have further discussion with CITB and employers.

The Spending Review also confirmed an increase in infrastructure spending which will now reach £120 billion over the course of this Parliament. Over half is focused on transport, with the Government investing £61 billion in High Speed 2, roads, rail and local transport networks. The Government will publish a National Infrastructure Delivery Plan in spring 2016, setting out in detail how it will deliver key projects over the next five years.

The UK Guarantees Scheme which helps projects leverage funding from banks and capital markets is being extended to March 2021.

A five-point plan to deliver 400,000 affordable homes by 2021 was also announced, with a focus on supporting more affordable home ownership and planning reforms to free up more land.

The Government has published a detailed Spending Review and Autumn Statement 2015, as well as the summary of responses to the Apprenticeship Levy consultation.