Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how much of the funds raised through the apprenticeship levy was allocated directly to apprenticeships; and how much was redirected to general government revenue in each of the last ten financial years.

The Apprenticeship Levy was introduced in 2017, and is paid by large employers with a total annual pay bill of over £3 million. Their contribution is 0.5% of their total annual pay bill.

HMT sets the Department for Education’s budget at each Spending Review. The apprenticeship budget funds all apprenticeship training in England – both existing and new apprenticeships – across all employers.

Underspends are returned to HMT as per the Consolidated Budgeting Guidance.

While the Apprenticeship Levy is raised UK wide, apprenticeship policy and spending is devolved. This means that the devolved governments receive funding through the Barnett formula in relation to apprenticeship spending in England, with the formula applying in the normal way, as set out in the Statement of Funding Policy, when the Department for Education’s budgets change. As set out in the Policy, the Barnett formula applies to overall changes in DfE’s settlement at Spending Reviews. This means it is not possible to identify the Barnett consequentials for individual programmes. It is the devolved governments’ responsibility to allocate their funding in devolved areas as they see fit, including investing in their skills programmes, and they are accountable to the devolved legislatures for those decisions.

The table below sets out the apprenticeship budget in relation to Levy receipts once Barnett consequentials are accounted for. This is an indicative profile based on a population-based share, rounded to the nearest £5 million.