Derry robotics firm flagged £60m apprenticeship anomaly to NIAC

A Derry robotics company has raised the inability of firms in the north to access apprentices in the same way as their peers in Britain, a Tory MP has said.

By Kevin Mullan
Wednesday, 15th June 2022, 4:05 pm

Robert Goodwill made the claim at a session of the NI Affairs Committee.

He reported that during a visit to Derry one firm complained that despite paying an apprenticeship levy - like businesses in Britain - they don’t have the same access because the administration of it is not devolved.

“When we were in Londonderry, we went to a number of companies, including one in very high-tech robotic production technology. They were complaining that companies that paid the apprenticeship levy in NI were not able to draw that down in the same way that companies in England or other parts of the country could, and said that that money was chucked on the heap at Stormont and that they did not really get a chance,” said the MP.

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The apprenticeship levy is a tax levied on employers and used for the funding of apprenticeship programmes.

He asked Paul Mac Flynn, Co-Director, Nevin Economic Research Institute, if this was problem.

“Is it a disadvantage in NI that we do not have a functioning deployment of apprenticeship levy funds?” he asked.

Mr. Mac Flynn replied: “Yes. It was looked at by the recent Fiscal Commission, which was looking at devolving tax-raising powers to NI. It did not come to make a recommendation on the apprenticeship levy but definitely identified it as a design flaw. The problem is that companies are allowed to bid for the pot of money, but if the pot of money is not disbursed it just goes back to the Executive.”

The Fiscal Commission looked at whether or not it would be advisable to devolve the £60m scheme and last month reported: “The apprenticeship levy operates on a UK-wide basis; however, although NI businesses pay the same levy, they are unable to access apprentices through government vouchers in the same way. The NI Executive does, however, receive a Barnett consequential as a result of UK government spending on apprenticeships in England.”

Ultimately the commission did not recommend devolution: “There is a strong case for devolving the apprenticeship levy (£60m), not least because it complements the NI Executive’s responsibility for economic growth and skills.

“It should only be devolved if powers over income tax are also devolved. The cost of doing so in isolation is likely to be excessive. As with income tax, we recommend it should continue to be administered by the UK Government, through HMRC.” Mr. Mac Flynn, addressing the NIAC, said: “The job of work that probably needs to be done is to work with local companies to find out why they are not getting back from the apprenticeship levy what they are putting in.

“It has been rumbling for a while now and it seems like a problem that could be quite easily fixed by working with those companies to improve the outcome in terms of bids.”