We now have a little more detail about the funding of apprenticeships through an apprenticeship levy, which was announced in the Summer Budget.
Payable by larger employers, the apprenticeship levy will be introduced in April 2017 and set at a rate of 0.5% of an employer’s pay bill. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any pay bill in excess of £3 million and less than 2% of UK employers will pay it. The levy will be paid through PAYE and it is expected that, by 2019-20, the levy will have raised £3 billion in the UK. Spending on apprenticeships in England will be £2.5 billion, and Scotland, Wales and Northern Ireland will receive their fair share of the levy. The aim is that the levy will put control of apprenticeship funding in the hands of employers and will encourage employers to invest in their apprentices and take on more. Employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay into the levy, through a top-up to their digital accounts. Employers who do not pay the levy will have access to government support for apprenticeships. As well as increasing the numbers of apprentices the Government will ensure quality is increased too. The Government will establish a new employer-led body to set apprenticeship standards and ensure quality. The body will be independent of government and will also advise on the level of levy funding each apprenticeship should receive. Funding caps will be significantly higher for programmes that have high costs and are of high quality.
Automatic Enrolment
Over 5.4 million individuals have now been automatically enrolled into a pension. Opt outs have been low and as a result the Government says that the number of people who are saving for their retirement is at its highest point since 1997. To simplify the administration of automatic enrolment for the smallest employers in particular, the next two phases of minimum contribution rate increases will be aligned to the tax years. Instead of increases taking place in October, they will now occur in April of the following year.
Support for pensioners
In April 2016, the basic State Pension increase will once again be determined by the triple lock. This means that a full basic State Pension will rise to £119.30 a week, an increase of £3.35 and the biggest real terms increase to the basic State Pension since 2001. The Government is also simplifying the State Pension and providing more support for the poorest pensioners. From April 2016, those reaching pensionable age will receive a new, ‘single-tier’ pension with a starting rate of £155.65. Those reaching pensionable age before the reforms are introduced will receive their State Pension in line with the current rules.
Other areas of interest
Tax credits
The Government is not going to phase in any changes to tax credits. They are being phased out anyway as the Government introduces Universal Credit. The tax credit taper rate and thresholds remain unchanged and the income rise disregard will reduce to £2,500 in April 2016. The Government will propose no further changes to the Universal Credit taper, or to the work allowances, beyond those that passed through Parliament.
Protecting the police budget
The Government will protect overall police spending in line with inflation – an increase of £900 million by 2019-20. Additional funding will be provided for forces which have strong proposals to support efficiency and reform. This funding will allow forces to adapt to changing crime threats and train more firearms officers to make sure the country can be protected from terrorist threats. The National Crime Agency’s budget will also be protected in cash terms to help cut organised crime. In addition £1 billion will be spent on 4G communications for police forces and other emergency services, allowing officers to take mobile fingerprints and electronic witness statements. This will free up officers’ time, saving around £1 million a day when fully operational.
CIPP Policy News Journal
25/04/2016, Page 173 of 453
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