VITAL training schemes to get young people into work are are being undermined by a £25 million cash grab by SNP ministers, it has been claimed.

Efforts to improve the skills of school leavers have been dealt a blow by the Scottish Government's failure to give the money to them, according to the local government umbrella body Cosla.

The row is over the introduction of a UK-wide Apprenticeship Levy from April 2017 which will see large employers pay a fee to the HMRC.

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The UK Government has estimated Scotland’s share of the scheme's funding at around £230m every year which has been included in the Holyrood Government's block grant.

Cosla has estimated that, based on last year’s pay bill for councils, the levy could potentially cost them £24m as employers and they say they already spend at least £25m on providing opportunities for apprenticeships, graduate trainees and probationer teachers as wll as work experience

Councils were told in December that local government would have its levy funding returned in full in the next financial year by the Scottish Government, but ministers have now performed a U-turn and will keep the cash.

A Cosla spokesman said: “From our perspective this decision by the Scottish Government undermines programmes to develop the young workforce and is nonsensical.

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“It is also entirely counterproductive to efforts to reduce youth unemployment in Scotland by putting in danger the future of valuable local initiatives provided by councils for young people.

“Our view is that the Scottish Government should reverse this decision as it will not only be detrimental to local economies, but ultimately take away valuable opportunities for our young people.”

Stephen McCabe, the leader of Inverclyde Council, added: “No-one has a problem with the principal of a levy if it is gong to give people the right skills they require, but the issue is why are public bodies not exempt?

“Effectively, the Scottish Government could make local authorities exempt by giving us back the money that we are going to pay, but they have decided not to do that.

“For councils to pay nearly £25m which the Scottish Government then get back from Westminster, but don’t return to councils is simply not fair or sensible.”

The Scottish Government said it intended to invest the money with other agencies such as Skills Development Scotland, further education colleges and other initiatives.

Jamie Hepburn, Minister for Employability and Training, said all funds raised through the Apprenticeship Levy would be invested in skills, training and workforce development.

He said: “While the levy settlement forms part of the Scottish block grant, its proceeds will be fully utilised to fund apprenticeships, training and employability support.

“The Scottish Government is working with employers and other partners to ensure that we can maximise the benefits of the approach we are taking.

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“We very much value local authorities’ wide ranging contribution to support young people, but it is not realistic to reimburse the levy contribution of local authorities in addition to the local government budget settlement. This would be unfair on other levy paying employers and would be at the expense of programmes to support skills.”

In 2014 the Scottish Government embarked on a seven year national programme to develop the young workforce in what it described as a “constructive partnership” with Cosla and other bodies.

At the heart of the strategy were proposals to improve the quality and increase the quantity of modern apprenticeships to reduce youth unemployment by 40 per cent by 2021.

In the foreword to the Developing the Young Workforce (DYW) strategy document, Roseanna Cunningham, the Cabinet Secretary for Fair Work, Skills and Training, said: “Local government, with its responsibilities for our schools and local economic development, are central to this effort.

“In jointly owning this implementation plan, central and local government are committing to working in tandem in the interests of our young people.”