To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what estimate he has made of the amount of apprenticeship levy that will expire and be returned in each month from December 2023 over the next three years.
24 January 2024
The government introduced the apprenticeship levy to incentivise larger businesses to develop and invest in their own apprenticeship programmes whilst ensuring the availability of funding for smaller employers wanting to offer apprenticeships. Through the levy, the government is increasing investment in the apprenticeships system in England to £2.7 billion in the 2024/25 financial year to support employers of all sizes to boost the skills of their workforces.
The funds in apprenticeship service accounts are available for levy-paying employers to draw on for 24 months before they expire on a rolling, month-by-month basis. In December 2023, £104 million expired from levy-paying employers’ apprenticeship service accounts. Demand for apprenticeships is employer-led and the government does not have an estimate of future levy expiry from employers’ apprenticeship service accounts.
The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the apprenticeships budget which funds apprenticeships in England for employers of all sizes. As such, expired funds from employers’ accounts do not represent funding that is lost to the system. Rather, the department directs this funding to supporting apprenticeships in small and medium-sized enterprises, to English and mathematics training for apprentices and to additional payments to employers, training providers and apprentices. Therefore, the department’s spend against its annual apprenticeship budget is a better indicator of the extent to which employers’ levy contributions are being utilised to drive skills development in England. On average, 98% of the English apprenticeships budget has been spent over the last two financial years.