Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government how they will use the underspend of the apprenticeship levy.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
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.
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.
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.
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: https://www.gov.uk/government/publications/department-for-education-consolidated-annual-report-and-accounts-2021-to-2022.
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.
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.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what assessment they have made of the reduction in (1) the percentage of apprentices under the age of 19, and (2) the number of entry level apprenticeships; and what plans they have to reverse this trend.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The government wants more young people to benefit from apprenticeships that offer high-quality training and opportunities for progression.
There have been 56,200 apprenticeship starts by people under 19 so far in the 2021/22 academic year, compared to 38,800 in the 2020/21 academic year, and 58,100 in the 2019/20 academic year. The proportion of apprenticeship starts in the under 19 age group have recovered, following the decrease seen this time last year, with under 19-year-olds now accounting for 27.6% of total starts.
Employers have developed 647 apprenticeship standards, 140 of which are at Level 2, which is equivalent to GCSE level, and 210 of which are at Level 3, which is equivalent to A level. The department continues to welcome the development of high-quality apprenticeship standards by employers at all levels. There have been 55,300 apprenticeship starts at Level 2 so far in the 2021/22 academic year, compared to 41,500 in the 2020/21 academic year, and 65,000 in the 2019/20 academic year. Starts at this level equate to 27.1% of total starts.
There have been 88,100 apprenticeship starts at Level 3 so far in the 2021/22 academic year compared to 69,100 in the 2020/21 academic year and 87,600 in the 2019/20 academic year. Starts at this level equate to 43.2% of total starts.
Starts at both Levels 2 and 3 still account for 70% of all apprenticeships. Further breakdowns on apprenticeship starts by age and level are published each month and are available at: https://www.gov.uk/government/statistics/apprenticeships-and-traineeships-may-2022.
The department is continuing to improve the apprenticeship system for employers. We are making apprenticeship training even more flexible, so that employers across all sectors can access apprenticeships. We are also helping employers choose more flexible training models like flexi-job, front-loaded, and accelerated apprenticeships.
The department has a range of work underway to ensure that young people can access apprenticeships more easily. This includes working on new ways to connect young people in schools and colleges with employers and providers much earlier in their final year, when they are considering their options. It also includes working with the Institute for Apprenticeships and Technical Education to identify and promote standards most suitable for those starting their careers. We are also working with employers and providers to highlight the benefits of hiring young apprentices, and increase their use of our free recruitment tools so that vacancies are accessible through our ‘find an apprenticeship’ service.
Additionally, the department is exploring options with the Office for Students to allocate up to £8 million from the strategic priorities grant to accelerate the growth of degree apprenticeships. Degree apprenticeships offer a high-quality alternative to traditional university study. They have a key role to play in ensuring that young people are doing courses that give them the skills and knowledge to move into high-value employment that benefits them and the economy.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what plans they have, if any, to devolve funding and responsibility for apprenticeships for 16–19-year-olds to Metro Mayors.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The department’s reforms have created an employer-led apprenticeship system. Employers across England are now empowered to design the apprenticeship standards which meet their skills needs and to choose the apprenticeship training they need from a range of high-quality providers.
In doing so, both employers who pay the apprenticeship levy and those who do not can directly access government funding for apprenticeships. As such, local employers are in control of an apprenticeship system which enables them to address local skills needs. As a result, the department currently has no plans to devolve any funding or responsibility for apprenticeships to mayors or other local partners.
The department has worked closely with employers and mayoral combined authorities to help them better address local skills needs through apprenticeships. We have improved the apprenticeship levy transfer system, so it is easier for large employers to transfer their unused funds to smaller employers, building on the work of the West Midlands combined authority.
In September 2021, the department introduced a new online service to enable large employers to pledge funds available for transfer, allowing a much wider range of businesses to browse and apply for available funds. Employers using the service can choose to pledge funds for a specific geographic area. To date, employers including Amazon UK, DPD, and HomeServe have pledged to transfer almost £9 million.
The government is increasing overall apprenticeship funding to £2.7 billion by the 2024/25 financial year. This funding will support apprenticeships in employers of all sizes, including small employers who do not pay the apprenticeship levy and for whom the government will continue to pay 95% of training costs.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what plans they have to reform the apprenticeship levy; and what plans they have to redistribute unused funds from the apprenticeship levy to other forms of post-16 education and training.
Answered by Baroness Berridge
The apprenticeship levy is an important part of our reforms to apprenticeships. As well as funding new apprenticeships for levy-paying employers, income from the levy is used to fund new apprenticeships for employers that do not pay the levy, as well as existing apprentices that started in previous years. Levy-paying employers have 24 months in which to spend the funds available to them before they begin to expire on a rolling, month-by-month basis.
We do not anticipate that all employers who pay the levy will need or want to use all the funds available to them, but they are able to do so if they wish. Expired apprenticeship levy funds are not lost but are used to support apprenticeships in smaller employers and to cover the ongoing costs of apprentices already in training.
Apprenticeships are vital in driving economic recovery, and we continue to improve apprenticeships to make it easier for employers to make full use of their levy funds. Levy-paying employers can transfer up to 25% of their annual funds to help support apprenticeship starts in their supply chain or to meet local skills needs. As announced at the Spending Review by my right hon. Friend, the Chancellor of the Exchequer, we are improving the apprenticeship levy transfer process so that, from August 2021, employers who pay the levy will be able to pledge funds for transfer to other employers, including small-medium enterprises (SMEs), supported by a new online service to match levy payers with SMEs.
In addition, we are making apprenticeships more flexible so that they better meet the needs of employers from all sectors. We continue to support employers by encouraging greater use of innovative apprenticeship training models, such as the front-loading of off-the-job training. We are also developing accelerated apprenticeships so that apprentices with substantial prior learning (e.g. T Level graduates) can complete an apprenticeship more quickly.
We currently have no plans to review what apprenticeship levy funds can be spent on.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what assessment they have made of the findings in the OECD Adult Skills survey, published in 2012, which found that the UK is the only country where the numeracy skills of 16- to 24-year-olds were lower than the over-55 age group; and what actions they are taking to address this.
Answered by Baroness Berridge
We recognise the importance of numeracy skills, both in work and everyday life, as securing good levels of numeracy increases individual productivity and improves earnings and employment opportunities. Our policy is to offer everyone mathematics qualifications and courses which are of high quality and which lead to genuine improvements in skills.
Since the Organisation for Economic Cooperation and Development survey was published eight years ago, we have taken a number of steps to improve numeracy skills particularly for this age group.
We have introduced a requirement that 16 to 19 year old students on a study programme without GCSE mathematics grade 4 or above must continue to study the subject. We have also ensured mathematics skills are a requirement of apprenticeships and T Levels.
As well as GCSE mathematics, post-16 students can also study Functional Skills mathematics. We have recently reformed these qualifications to improve their rigour and relevance, and to ensure they provide students with the essential skills they need for life and work.
In 2019, 76.2% of 19 year olds held a level 2 qualification in mathematics, an increase of 3.8 percentage points since 2013/2014 (the year before we required students to continue studying English and mathematics).
This is in addition to our continued support for adults, through our statutory entitlement. All adults who are yet to achieve a GCSE grade 4 or above, or an equivalent qualification, in mathematics can access this provision free of charge, regardless of income or employment status.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government, for the most recent year in which figures are available, (1) how many, and (2) what percentage of, companies which pay the apprenticeship levy spent their entire apprenticeship fund in that year.
Answered by Baroness Berridge
Employers in England who pay the apprenticeship levy can access funds for apprenticeship training 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. During the 2019-20 financial year, 15% of employer accounts fully utilised the funds entering the levy-payer’s account. This is shown in the attached table.
Levy declarations relating to the 2019-20 financial year entered employer accounts between May 2019 and April 2020, as payments enter accounts a month in arrears. Payments relating to the 2019-20 financial year were made between May 2019 and April 2020, also a month in arrears. These payments cover the cost of apprenticeships training only. The cost of any additional payments to employers and/or providers and additional support, such as for English and maths training, is met by the apprenticeship budget and therefore is not deducted from employer’s accounts.
Employers have 24 months to spend the funds available to them. It is therefore possible for employers to spend more than they declare in a financial year.
Spending on the apprenticeship programme is demand-led and employers can choose which apprenticeships they offer, how many they offer and when they are offered. We do not anticipate that all employers who pay the levy will need or want to use all the funds available to them, but they are able to do so if they wish.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
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 by Baroness Berridge
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.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what assessment they have made of the impact of COVID-19 on the number of international students wishing to study at UK universities; and what steps they will take to counter the effects of a long-term reduction in international student numbers.
Answered by Lord Parkinson of Whitley Bay - Parliamentary Under Secretary of State (Department for Culture, Media and Sport)
The government recognises that the COVID-19 outbreak will have an unparalleled impact on all elements of the global and UK economy. The higher education sector, including student recruitment, is no exception. We have been working closely with the sector to monitor possible impacts of COVID-19 on international student numbers, including restrictions on travel.
We have been clear that our world-leading universities, which thrive on being global institutions, will always be open to international students. Engaging closely with other government departments and the higher education sector, the Department for Education is working to reassure current and prospective international students that UK higher education is ‘open for business’ and remains world-class, and that the UK is a safe and welcoming place to study. This engagement includes continued work with Study UK (the government’s international student recruitment campaign, led by the British Council), support for the sector-led #WeAreTogether campaign, and a package of communications targeted directly at international students, making clear our world-leading offer.
My hon. Friend, the Minister of State for Universities, wrote an open letter to current international students in April, setting out flexibilities that HM Government and higher education providers were introducing to ensure that international students could continue or resume their studies. With her counterparts in Scotland, Northern Ireland, and Wales, she also wrote on 22 June to prospective international students to outline the support and guidance available to those considering studying in the UK from this autumn. This letter reiterates a number of flexibilities that the government has already announced for international students. These include allowing for the switching of visa categories within the UK, confirmation that distance/blended learning will be permitted for the 2020/21 academic year (provided that international students’ sponsors intend to move to face-to-face learning as soon as circumstances allow) and steps further to promote the new graduate route, which will be introduced from summer 2021.
The graduate route will be simple and light-touch: it will permit graduates at undergraduate or Masters level to remain in the UK for 2 years and PhD graduates to remain in the UK for 3 years after they have finished their studies in order to work or look for work at any skill level. This represents a significant increase in the generosity of our offer to international students and will help ensure the UK higher education sector remains competitive internationally. On 16 June, the government also confirmed that international students present in the UK before 6 April 2021 will be eligible for the graduate route if they meet the other requirements of the route when it is introduced.
My hon. Friend, the Minister of State for Universities, also announced that Sir Steve Smith would act as the UK’s new International Education Champion. He will assist with opening up export growth opportunities for the whole UK education sector, which will include attracting international students to UK universities. In addition, our review of the International Education Strategy this autumn will respond to the challenges posed by COVID-19 across all education settings.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what plans they have to review (1) the apprenticeship system, and (2) the apprenticeship levy.
Answered by Baroness Berridge
The government is committed to improving the working of the apprenticeship system and the apprenticeship levy. We are continuing to engage closely with businesses and to listen to their views about the operation of the levy and the apprenticeships programme more broadly, taking into account the impact of the Coronavirus (COVID-19) outbreak.
The government’s ‘Plan for Jobs’ will help to kickstart the nation’s economic recovery and apprenticeships will be more important than ever in helping businesses to recruit the right people and develop the skills they need to recover and grow, both now and in the long-term.
We recognise that employers at the moment face increased challenges with hiring new apprentices and so we will introduce a new payment of £2,000 to employers in England for each new apprentice they hire under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. Details can be found here https://www.gov.uk/government/organisations/hm-treasury.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what plans they have to ensure that employers use at least half of their apprenticeship levy spend on new starters.
Answered by Lord Agnew of Oulton
The apprenticeship programme is employer-led. The department’s reforms have put employers in the driving seat, supporting them to design the high-quality apprenticeship standards that meet their skills needs. It is also for employers to decide which apprenticeships they offer, when, and to whom.
Apprenticeships provide valuable opportunities for people of all ages. While the department has no current plans to restrict the use of employer’s levy funds, all aspects of the programme will be kept under review in response to employer feedback and as preparations for a comprehensive Spending Review next year continue.