Businesses with a wage bill of over £3 million have been paying the apprenticeship levy since April 2017.
But according to Fe News, only 13.7% of the levy has been spent on training, leaving £2.3 billion in the pot unspent. These funds are wiped after 24 months, meaning that employers have now missed out on £37 million in funding towards hiring apprentices or upskilling staff – which could’ve meant an extra 4625 apprenticeship starts (dependant on pathway).
In May 2019, employers lost access to £11 million of their apprenticeship levy funding – about 8% of the £135 million paid in May 2017.
It’s not surprising, considering that the number of apprenticeship starts fell by nearly 200,000 in the first year – from 495,000 in 2016/17 to 376,000 in 2017/18.
This decline was largely attributed to the change in the funding system, but the government has listened and made some policy updates to give allow more flexibility.
Changes to the Levy
The first change came when the expiry period for funds was extended from 18 months to 24 months, in direct response to a slow adoption rate of the new system.
Levy paying employers were previously able to transfer 10% of their levy funds to other employers, or Apprenticeship Training Agencies. In April 2019, this transfer was increased to 25% of annual levy funds, after feedback indicated that this was not always enough to be worth doing.
Utilising the Levy
We’ve put together a guide of 8 key challenges we see faced by levy payers, and the recommended solutions we’ve delivered.
This means that for organisations of any size, we can help you utilise your levy funds, and make the most of apprenticeships.
Whether your focus is on filling skills gaps within your organisation or upskilling existing talent with new tools to make them more capable, we can help.