Jamie Hepburn, Scotland’s employability minister, said “The introduction of this levy is of fundamental concern for us. We believe that this levy undermines our uniquely Scottish approach to apprenticeships and imposes an unnecessary financial burden on employers.’

The levy will be introduced in April 2017, and will be set at 0.5% of an employer's payroll bill. Every employer will receive a £15,000 allowance to offset against the levy, and businesses with a pay bill of under £3m will not be affected. The UK government has said the money raised will be used to fund more than three million new apprenticeships.

Scotland says it has surpassed its target to deliver 25,500 modern apprenticeship starts this year, which will now increase to 26,000 for the year ahead, with the aim of increasing numbers to 30,000 by 2020.

Hepburn said the Scottish government will launch a consultation on 13 July asking for feedback on how to ensure the 2020 targets at met; developing more graduate level apprenticeships; creating an employer fund for wider workforce development; and providing support for those outside the labour market to prepare them to enter the skilled workforce.

Hepburn said: ‘Over recent months the Scottish government has been engaging with a range of employers and representatives across a variety of sectors to better understand the impact that the levy will have, and their thoughts on how levy funding could be used in to enhance productivity and economic growth.

‘After those discussions with employers it is clear that they are looking for a wider approach than what is being developed by the UK government. This is why we have decided to consult with industry on how this levy can be used to support apprenticeships and wider skills development. An important part of this consultation will involve working with the newly established Scottish Apprenticeship Advisory Board as well as other industry bodies and individual employers.’