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<p>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. As the apprenticeship levy is UK-wide, income from
the levy also supports the Devolved Administrations to invest in their skills programmes.</p><p>
</p><p>Employers in England who pay the apprenticeship levy can access funds for apprenticeship
training and assessment by registering for an apprenticeship service account. The
funds in employers’ accounts reflect the ‘English percentage’ of an employer’s levy
contribution and include a 10% top-up from the government. The department does not
record industry, sector or organisation type when levy-paying employers register an
apprenticeship service account. For this reason, data which shows which sectors were
most or least likely to spend their funds cannot be provided. The department does
hold information relating to individual employer accounts but it would not be appropriate
to disclose this information without consulting with employers.</p><p> </p><p>Employers
can use their levy funds for apprenticeships in their own business or transfer up
to 25% of their funds to other businesses. Funds that levy payers do not draw on are
used to fund apprenticeships in small and medium sized businesses who do not pay the
levy. Levy payers are not expected to use all funds available to them, though they
are able to do so.</p><p> </p><p>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. The table attached shows the total funds that expired
from levy-paying employers apprenticeship service accounts in each month since May
2019. The decline in levy expiry value for October 2021 was due to a delay transferring
levy into employer accounts. As a result, employers were granted an additional month
to spend those funds, to ensure that the 24-month window to spend funds was maintained.</p><p>
</p><p>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 (SMEs),
to English and mathematics training for apprentices and to additional payments to
employers, training providers and apprentices. On average, 98% of the English apprenticeships
budget has been spent over the last two financial years.</p><p> </p><p> </p>
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