SCOTLAND’s biggest public service trade union has called for the country to be made exempt from a new tax being introduced by George Osborne which could see the country lose almost £400m a year to help fund millions of apprenticeships elsewhere in the UK.

Dave Watson, Scottish organiser of public services union Unison, said he was particularly concerned an apprenticeship levy unveiled by the Chancellor could see frontline organisations – including schools and hospitals – facing a £146m cut to their annual budgets.

He spoke out after the Scottish Government, which already runs an apprenticeship scheme, warned the tax would see Scotland lose all or part of £391m, with no guarantee any of the money would come back to the country.

“The irony is that the public sector in particular in Scotland has a good record of having quality apprenticeships...so it’s a bit rich to tax them for already doing this work,” he said, adding he shared the Scottish Government’s concerns.

“The Scottish Government’s modern apprenticeship scheme is not without its critics... but if there are problems with the Scottish Government scheme it’s up to the Scottish Parliament to sort them out.


Dave Watson of Unison: 'It’s a bit rich to tax them for already doing this work'


“It may not be perfect, but the solution is not to have the UK Government dabble with it. It would be more sensible [for Scotland to be exempt] ...at the moment it’s not even clear if Scotland would get the money back.”

Fair work secretary Roseanna Cunningham warned the new tax would risk the Scottish Government’s ability to continue to fund its existing apprenticeship scheme.

Over the past four years, the Scottish programme has created 100,000 apprenticeship places across a wide range of sectors including in construction, engineering and manufacturing, as well as in IT, finance and the creative industries.

“It is now almost two months since the Chancellor announced the apprenticeship levy and we still don’t know whether a single penny of the money raised in Scotland will come back to Scotland,” said Cunningham.

“The suspicion must be that Westminster has no intention to provide a fair share to Scotland... That would rob Scotland of hundreds of millions of pounds, including up to £146 million per year from schools, hospitals and public services.”

Under Osborne’s plan, announced in the Budget and details of which are still being finalised, large public and private sector employers throughout Britain would have to a pay a levy to the Treasury with the funds distributed to organisations to support three million training schemes for young workers by 2020.

Facing concerns that the money may not come back to Scotland, Cunningham wrote to UK skills minister Nick Boles to seek clarity.

“Not only will this effectively be a stealth cut to Scotland’s public services, but it would put this at real risk our ability to fund Scotland’s distinct Modern Apprenticeship system,” she said.

“UK ministers need to answer the simple question we have posed: are they going to give Scotland it’s fair share of the levy or is this just another cut to our public services?”

Alison Johnstone, MSP for Lothian and education spokesperson for the Scottish Greens, urged the UK Government “to come clean about their plans for the distribution of the apprenticeship levy fund.

“If Scotland is paying money into an apprenticeship pot, then Scottish young people need to see that money translate to more opportunities,” she said.

“Apprenticeships provide an extremely valuable education opportunity for so many people – they are chance to learn skills, to gain a qualification and to get a foot in the door in the job market. In recent years, Scotland has begun to develop these opportunities, with the number of places through the modern apprenticeship scheme available increasing steadily. A lot remains to be done to improve the quality and quantity of apprenticeships, and well as the pay apprentices receive and changes to available funding could set us back considerably.”

Scottish Government civil servants worked out that £391m a year of funding would be raised from Scottish businesses and public sector organisations, based on an assumption that the levy would be at the rate of one per cent of its total employees’ earnings and applied to organisations with more than 250 staff. However, the rate could be higher – possibly up to two per cent.

A spokesman for the Department for Business, Innovation and Skills said officials were working with devolved administrations to ensure “a fair and transparent approach” to funding across the UK.

He added skills policy is a devolved area, so the Scottish Government would continue to have complete flexibility over how they support businesses through training and apprenticeships.