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<p>The apprenticeship levy is an important part of the government’s reforms to create
a high-quality, employer-led apprenticeships system, and it supports employers of
all sizes to invest in high-quality apprenticeship training.</p><p>The government,
via HM Revenue and Customs, collects the apprenticeship levy of 0.5% on total payroll
from businesses across the UK with a payroll of more than £3 million. From this, HM
Treasury (HMT) sets an English apprenticeships budget for the department, and the
devolved governments receive a share of the funding calculated using the Barnett formula.</p><p>The
department’s apprenticeships budget is used to fund training and assessment for new
apprenticeship starts in all employers, levy and non-levy paying employers alike,
across England, and to cover the ongoing costs of apprentices already in training
and any additional payments made to employers and providers. This means that levy
payers’ unspent funds are used to support additional costs and apprenticeships in
smaller employers.</p><p>In the 2021/22 financial year, the total spend on apprenticeships
in England was £2,455 million, against the budget of £2,466 million, meaning that
99.6% of the apprenticeships budget was spent. Previous years’ spending on apprenticeships
is set out in the Department’s Annual Report and Accounts, which can be accessed at:
<a href="https://www.gov.uk/government/publications/department-for-education-consolidated-annual-report-and-accounts-2021-to-2022"
target="_blank">https://www.gov.uk/government/publications/department-for-education-consolidated-annual-report-and-accounts-2021-to-2022</a>.</p><p>Any
underspends in overall departmental budgets by the end of the financial year are first
returned to HMT, as per the Consolidated Budgeting Guidance. As employers choose which
apprenticeships they offer and when, annual spend of the apprenticeship budget is
subject to employer demand.</p><p>The government is increasing apprenticeship funding
to £2.7 billion by the 2024/25 financial year and has removed the limit on the number
of apprentices that small and medium-sized enterprises can recruit to support more
employers to benefit from the high-quality training that apprenticeships offer.</p><p>
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