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Apprentices: Taxation

Question for Department for Education

UIN 3725, tabled on 22 October 2019

To ask the Secretary of State for Education, if he will ensure that unused apprenticeship levy funding is devolved to (a) the West of England combined authority and (b) other local authorities to respond to local needs.

Answered on

29 October 2019

The apprenticeship levy and funding arrangements are an important part of our changes to raise apprenticeship quality, supporting employers to make a long-term sustainable investment in training.

Employers’ levy funds are distinct from the Department for Education’s ring-fenced annual apprenticeship budget. The funding available in 2019-20 for investment in apprenticeships in England is over £2.5 billion, double what was spent in 2010-11. This fixed budget covers the costs of all apprenticeships, new apprenticeships in both levy-paying employers and those that do not pay the levy, and existing apprenticeships for those who started in previous years.

The budget is not affected by the value of levy funds expiring from employers’ accounts each month. We have never anticipated that all levy-payers will use all the funds available to them, but they are able to if they wish.

Individual employers already have control over where apprenticeship funds are spent to meet their current and future skills needs. Transfers to other employers can support local skills needs and help sectors build sustainable capability for the future. Combined authorities, including the West of England combined authority, sector bodies and Local Enterprise Partnerships can work with employers to encourage more effective use of their uncommitted levy funds. We are pleased to see that levy payers with uncommitted funds are increasingly using transfers to support apprenticeship starts in non-levy paying employers.