Question to the Department for Education:

To ask His Majesty's Government (1) how many, and (2) what percentage, of levy-paying employers have transferred the maximum 25 per cent of apprenticeship levy funds to other businesses, for each of the past five financial years.

UK employers with an annual pay bill above £3 million pay the apprenticeship levy, which is collected by HM Revenue & Customs. The government introduced the apprenticeship levy to incentivise larger businesses to develop and invest in their own apprenticeship programmes whilst ensuring the availability of funding for smaller employers wanting to offer apprenticeships. Through the levy, the government is increasing investment in the apprenticeships system in England to £2.7 billion in the 2024/25 financial year to support employers of all sizes build their workforces. As the apprenticeships levy is UK wide, income from the levy also supports the Devolved Administrations to invest in their skills programmes.

In England, employers can use their levy funds for apprenticeships in their own business or transfer their funds to support apprenticeships in other businesses. Funds that levy payers do not draw on is used to fund apprenticeships in small and medium sized businesses. Levy payers are not expected to use all funds available to them, though they are able to do so.

Employers in England who pay the apprenticeship levy can access funds for apprenticeship training and assessment 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.

The funds available to levy-paying employers through their apprenticeship service accounts does not represent the total spend on apprenticeships for levy-paying empoyers and is not the same as the apprenticeships budget which funds apprenticeships for employers of all sizes. On average, 98% of the apprenticeships budget has been spent in the last two financial years.

The table below shows the number of levy-paying employers that have spent more than 50% of the funds declared in their apprenticeship service accounts, including the 10% top-up from the government, in each financial year from 2018/19 to 2022/23.

The department is supporting employers to make greater use of their levy and have improved the transfer system to make it easier to find other employers who wish to take on apprentices with transferred funds. In April 2019, the department increased the transfer allowance from 10% to 25%, so levy-paying employers could transfer more of their annual funds to support any employer. Since September 2021, over 500 employers, including ASDA, HomeServe, and BT Group, have pledged to transfer over £33 million to support apprenticeships in businesses of all sizes. The table below shows the number of levy-paying employers who spent all of their transfer allowance in each financial year from 2018/19 to 2022/23.

With regard to allowing levy-paying employers to use their funds on non-apprenticeship training schemes and courses, I refer the noble lady to the answer of 10 November 2023 to Question 614.