Question to the Department for Education:

To ask His Majesty's Government what plans they have to change the apprenticeship levy and to grant firms more flexibility to use funds from the levy to skill up their workforce.

The apprenticeship levy supports employers of all sizes to invest in high-quality apprenticeship training, both for career starters as well as those looking to upskill or retrain.

The success of the levy is enabling the department to invest £2.7 billion in apprenticeships in England in the 2024/25 financial year, and means that 98% of the English apprenticeships budget was spent over the 2021/22 and 2022/23 financial years. It is important that this funding remains protected to support apprenticeships. The government has no current plans to allow employers to spend the funds available to them on non-apprenticeships training. Allowing employers to use 50% of funds for non-apprenticeship training could create an additional cost of up to £1.5 billion a year. Without additional investment this could reduce apprenticeship starts to 140,000 a year, which would represent an almost 60% decrease on the 2022/23 academic year.

This month the department increased the proportion of the funds that levy-paying employers can transfer from 25% to 50%. This gives levy-paying employers even greater flexibility in how they use the funds available to them while also supporting more apprenticeships in other businesses, including small and medium-sized enterprises, flexi-job apprenticeship agencies and charities.

Employers can choose from almost 700 high-quality apprenticeships and have the option of using flexible training models, such as flexi-job apprenticeships and accelerated apprenticeships. Employers can also access other government-funded skills programmes, including T Levels and Skills Bootcamps.