Question to the Department for Education:

To ask Her Majesty's Government what proportion of the apprenticeship levy fund is currently being spent by non-levy payers.

The apprenticeship levy is collected by Her Majesty’s Revenue and Customs (HMRC) from all UK employers with a pay bill above £3 million. Scotland, Wales and Northern Ireland receive a share of levy funding, which increased to £459 million in 2019-20. It is for the devolved administrations to decide how their allocations should be used.

The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the Department for Education’s annual apprenticeships budget, which is set to fund apprenticeships in England only and is set irrespective of actual levy receipts. This budget is used to fund training for new apprenticeship starts in levy and non-levy paying employers and to cover the ongoing costs of apprentices already in training. It is also used to cover the cost of end-point assessment and any additional payments made to employers and providers.

In 2018-19, we spent £1.7 billion of the £2.3 billion ring-fenced budget. The underspend of £489 million against this budget is set out on page 71 of the Education and Skills Funding Agency’s annual report and accounts, published in July 2019 and attached. In 2019-20, our total budget allocation is £2.5 billion. Final end-of-year outturns will be published in the 2019-20 annual report and accounts.

Spending on the apprenticeship programme is demand-led and employers can choose which apprenticeships they offer, how many apprenticeships they offer and when they offer the apprenticeships. 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.

In 2018-19, levy paying employers spent, on average, around 30% of the funds available to them in their apprenticeship service accounts. In the same period, spending on apprenticeship training and assessment in non-levy paying employers was £0.5 billion.