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Apprentices: Taxation

Question for Department for Education

UIN HL10146, tabled on 10 November 2020

To ask Her Majesty's Government what plans they have to ring-fence an allocation of the apprenticeship levy for the training of people aged between 16 to 24; and if they have such plans, (1) what percentage of the levy they intend to ring-fence, and (2) by when it will be ringfenced.

Answered on

20 November 2020

We know that young people are likely to be disproportionately affected by the economic impact of the COVID-19 outbreak. To help businesses offer new apprenticeships, we are providing a payment to employers (in England) of £2,000 if they hire a new apprentice under the age of 25, and £1,500 for apprentices aged 25 or over.

The levy is an important part of our approach to raising apprenticeship quality and supporting employers to make a long-term, sustainable investment in training. The apprenticeship budget funds the cost of training for both levy-paying and non levy-paying employers, as well as apprenticeships that started prior to the reforms. In the 2020-21 financial year, funding available for investment in apprenticeships in England will remain around £2.5 billion, double what was spent in the 2010-11 financial year. It is for employers to choose the apprenticeships they want for their employees, and so funds are not allocated specifically to support training for apprentices of different ages.

We are working closely with the Department for Work and Pensions to develop a programme of work, to engage with Kickstart employers and to support them to move young people onto an apprenticeship in their organisation, where this is appropriate. We have recently amended our funding rules to ensure that employers taking on an apprentice who has previously been on the Kickstart scheme is eligible for the incentive payments.

We are tripling the scale of traineeships, providing an additional 30,000 places in the 2020/21 academic year, to ensure that more young people have access to high-quality training. We have introduced incentive payments of £1,000 per learner for employers who create new work placements available this academic year. Employers that offer traineeships nationally can claim the new payment for up to 10 learners in each region. For those who are not able to take up a job or work-based learning offer, we will fund up to another year of classroom-based study in high value skill areas to support young people’s progression into employment. We will fund extra places for specific high value courses at level 3 and level 2 that are aligned to priority areas for economic recovery.

Careers information, advice and guidance is crucial to help people to achieve the skills and experience that they need and meet the demands of businesses and employers for a skilled and flexible workforce. That is why we are investing an additional £32 million in the National Careers Service up to March 2022. This investment will provide individual careers advice for 270,000 more people whose jobs or learning have been affected by the COVID-19 outbreak.