Industry body Homes for Scotland (HFS) has warned that the country’s home builders face the prospect of paying a double levy to support apprenticeship training unless funds are ring-fenced to support the sector.

The issue has arisen as the Scottish Government sets out its response to the UK government Apprenticeship Levy and how it plans “to develop a distinctly Scottish approach to apprenticeships and wider skills development”.

The Apprenticeship Levy will operate UK-wide, with all employers paying 0.5% of their annual pay bill in excess of £3m through the PAYE system. In 2017-18 the Scottish Government will receive £221m in Levy funding, with this expected to increase to £239m by 2019-20.

Nicola Barclay, HFS chief executive, said the move could further hamper attempts to increase the supply of much needed new housing given ongoing skills shortages affecting the sector.

Ms Barclay said: “We back many of the Scottish Government’s proposals, in particular those which relate to Modern Apprenticeships including increased support for graduate level and foundation apprenticeships as well as the establishment of a Flexible Workforce Development Fund.

“However, already affected by significant skill shortages across all areas, including trades and professions, home builders face the prospect of paying a double levy given existing arrangements with the Construction Industry Training Board on training, qualifications and apprenticeships.

“We are therefore extremely disappointed that the Scottish Government has chosen not to address this matter in the form of direct support for our industry by channelling funds back, ignoring the concerns raised by HFS and other stakeholders.

“It is also surprising that the Scottish Government does not view home building as a priority sector for skills support, given the current housing crisis and the ambitious target for delivering 50,000 new affordable homes by the end of this parliament.

“HFS would advocate that the Levy funds be ring-fenced to support the sector, with access made simple, business-led and driven by the shared objectives that support the delivery of the Scottish Government’s key priorities of supporting economic growth and strengthening productivity.”