Question to the Department for Education:

To ask Her Majesty's Government what steps they are taking to reduce the amount of unspent apprenticeship levy funds.

The apprenticeship levy is an important part of our reforms to apprenticeships, which are vital for our economic recovery. 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. 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.

We continue to improve apprenticeships and 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 are also introducing a £7 million fund from July 2021 to help employers in England set up and expand flexi-job apprenticeship schemes, enabling people to work across multiple projects with different employers and benefit from the high-quality long-term training that an apprenticeship provides. We are consulting with employers to seek views on our vision and on how flexi-job apprenticeship schemes can support the growth of apprenticeships in certain sectors and professions.