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Levy to cost HA sector millions a year
The government’s new Apprenticeship Levy will cost the UK’s 30 largest housing associations a total of £7.4m a year, exclusive research by Inside Housing has found.
The new levy, confirmed in last month’s Spending Review, has been set at 0.5% of all employers’ wage bills over £3m.
This means the biggest associations in terms of stock owned face an average annual payment of nearly £250,000 a year from April 2017, based on their most recent published accounts.
The government expects the cash generated nationally for all employers to reach £3bn by 2019/20 and fund three million apprenticeships.
Jenny Allen, policy lead at the National Housing Federation (NHF), said the new levy could put a strain on housing association budgets and significantly alter current training schemes.
She said: “The levy will be challenging as housing associations are under a lot of pressure financially on a range of different things, so this is potentially yet another challenge facing them.
“There is a danger that it impacts on other kinds of training budgets because of the emphasis on apprenticeships. It is up to organisations to be smart about how they use it.”
Amicus Horizon would have to pay an annual levy of £116,265 based on its wage bill for 2014/15.
Chief executive Paul Hackett said the association was still assessing the potential impact of the new system, but admitted it could “cannibalise” existing training programmes.
Your Housing Group would have to pay £137,935 a year under the new system.
However, chief executive Brian Cronin said it provided an opportunity to expand the association’s existing apprenticeship programme.
He said: “We think we will be a net gainer from it. We are not getting paid for it now so it is an opportunity to access more money.
“Business needs to understand there is a cost to getting people trained to the right level.”
All employers will receive an annual allowance of £15,000 to offset the levy, restricting payments to organisations with wage bills of more than £3m a year.
Employers of all sizes would be eligible for the funding, but only 2% of organisations would be required to pay in, according to the government.
England will be allocated £2.5bn from the levy, with the government promising a “fair share” to Scotland, Wales and Northern Ireland.
30 LARGEST STOCK-HOLDING ASSOCIATIONS
| Association | Wage bill 14/15 | Annual levy |
|---|---|---|
| Places for People | £137.4m | £671,825 |
| Sanctuary | £192.6m | £948,000 |
| Wheatley Group | £54.7m | £258,655 |
| L&Q | £53m | £250,000 |
| Circle | £77.4m | £372,000 |
| Guinness | £67.5m | £322,500 |
| Affinity Sutton | £51.6m | £242,875 |
| Home Group | £74.4m | £357,010 |
| Riverside | £72.4m | £362,210 |
| Hyde | £45.3m | £211,345 |
| Symphony | £28.7m | £128,440 |
| Together | £33.2m | £151,240 |
| Orbit | £33.4m | £151,685 |
| Metropolitan | £37.9m | £174,645 |
| Sovereign | £39.3m | £181,385 |
| A2 Dominion | £33.8m | £154,000 |
| Gentoo | £51.3m | £241,645 |
| Your Housing Group | £30.6m | £137,935 |
| Genesis | £39.9m | £184,500 |
| Midland Heart | £41.9m | £194,525 |
| Wakefield & District | £36.4m | £166,990 |
| Notting Hill Housing | £32.6m | £148,000 |
| Stonewater | £22.3m | £96,345 |
| Bromford | £29.4m | £131,855 |
| Southern | £24.9m | £109,380 |
| Amicus Horizon | £26.3m | £116,265 |
| Peabody | £28.7m | £128,335 |
| WM | £25.4m | £107,050 |
| Aster | £37.1m | £185,440 |
| Anchor | £111.1m | £540,355 |
| TOTAL | £7,426,435.00 |
