“What really matters is creating high quality, well trained apprentices who can look forward to successful careers in industry,” he said. “This cannot be a simple numbers game where businesses are clobbered to pay for apprenticeships. The government’s approach to this requires a lot more sophistication than we’ve seen so far.”
Carolyn Fairbairn, CBI director-general, said: “This was a good spending review for longer-term investment in the economy but there’s a sting in the tail in the size and scope of the apprenticeship levy.”
She added: “The apprenticeship levy, set at 0.5%, is a significant extra payroll tax on business and by widening the net it will now catch more smaller firms. We welcome the creation of a levy board to give business a voice on how the money is spent and will work with the Government to ensure a focus on quality.
“Many firms will be disappointed to have been kept hanging on for a much-needed review of business rates until next year’s Budget.
“Firms will be reassured by the protection of the science budget, but the shift from grants to loans for Innovate UK could dampen bold and game changing innovation, particularly amongst smaller businesses.”
Tim Thomas, head of employment & skills policy at EEF, said: “Whilst the principle of the levy is not supported by business, the Chancellor’s announcement balances the need to secure future employer funding to invest in quality apprenticeships at a rate that the employers affected can afford.
“However, there are several future challenges which must be overcome before manufacturers can support the new levy. Employers must be able to control the funding, with the lowest possible level of red-tape. Any level of funding available to employers must allow them to cover the real cost of providing a quality apprenticeship with predictable and stable funding over the long term.”
However, Scuoler welcomed the Chancellor’s enthusiasm for an industrial strategy and his promise to continue to support Catapult centres: “By moving to protect science and research spending, he will give industry confidence and encourage many innovative companies to push ahead with the next generation of business ideas.”
Lee Hopley, EEF chief economist, agreed. She said: “Keeping the funding for Catapult centres on a stable footing is great news for innovative businesses across the UK. Maintaining the balance of funding between government and the private sector will help ensure the UK continues to encourage the kind of collaboration that will help innovators traverse the ‘valley of death’. The priority now is to keep the existing centres at the cutting edge of technology and expand the network as and when additional resources become available.”
On the switch from some grants to loans, she said: “Government can grease the wheels of successful innovation with money and by encouraging collaboration across business and the science base. The switch away from some grants may well prove to be a canny move to maintain the number of companies that can be aided with government support and by providing an escalator of funding options. But this needs to go hand in hand with access to the expertise and partnering opportunities that were part and parcel of previous schemes.”
Commenting on the cuts to the Carbon Capture & Storage programme, Claire Jakobsson, head of climate & environment Policy at EEF, said: “The cuts to the UK’s Carbon Capture and Storage (CCS) funding are extremely disappointing, whilst we understand that government has had to make some extremely tough decisions, this one is not in the long term interests of the UK economy or energy consumers.
“CCS has the potential to halve the costs of decarbonising the UK economy by 2050, which amounts to £32 billion a year by 2050. In choosing to save a relatively small sum of tax payer money in 2015, government is unnecessarily committing vast amount of future energy consumers’ money.
“Only last week the Energy Secretary’s ‘reset’ speech pledged to do away with writing of ‘blank cheques from the consumer, it is difficult to see today’s decision as not running counter to this principle.
“For many sectors, such as steel and cement, there are simply no other options available for cutting emissions. No CCS locks many industrial sectors into a carbon intensive future paying increasing amounts in carbon taxes.”
