Asked by: Priti Patel (Conservative - Witham)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what estimate he has made of the amount of apprenticeship levy that will expire and be returned in each month from December 2023 over the next three years.
Answered by Robert Halfon
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 to boost the skills of their workforces.
The funds in apprenticeship service accounts are available for levy-paying employers to draw on for 24 months before they expire on a rolling, month-by-month basis. In December 2023, £104 million expired from levy-paying employers’ apprenticeship service accounts. Demand for apprenticeships is employer-led and the government does not have an estimate of future levy expiry from employers’ apprenticeship service accounts.
The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the apprenticeships budget which funds apprenticeships in England for employers of all sizes. As such, expired funds from employers’ accounts do not represent funding that is lost to the system. Rather, the department directs this funding to supporting apprenticeships in small and medium-sized enterprises, to English and mathematics training for apprentices and to additional payments to employers, training providers and apprentices. Therefore, the department’s spend against its annual apprenticeship budget is a better indicator of the extent to which employers’ levy contributions are being utilised to drive skills development in England. On average, 98% of the English apprenticeships budget has been spent over the last two financial years.
Asked by: Priti Patel (Conservative - Witham)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what the total spend from apprenticeship levy accounts was in each year since 2017; and how much and what what proportion of that spend came through the (a) apprenticeship levy and (b) top-up.
Answered by Robert Halfon
The table below shows the total spend from levy-paying employers’ apprenticeship service accounts in each financial year since 2017/2018.
These figures do not cover the total spend on apprenticeships in levy-paying employers, such as additional payments for English and maths support and for taking on apprentices aged 16 to 18.
It is not possible to provide a breakdown of this spend by employers’ levy contributions and the 10% government top-up to those contributions.
Financial Year | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
Levy spend from employer accounts (£m) | 170 | 639 | 961 | 1,041 | 1,238 | 1,366 |
Asked by: Priti Patel (Conservative - Witham)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 13 December 2023 to Question 3789 on Apprentices: Taxation, what the total expired unused Apprenticeship Levy funds were in each month since May 2019.
Answered by Robert Halfon
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 to boost the skills of their workforces. As the apprenticeship levy is UK-wide, income from the levy also supports the Devolved Administrations to invest in their skills programmes.
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 department does not record industry, sector or organisation type when levy-paying employers register an apprenticeship service account. For this reason, data which shows which sectors were most or least likely to spend their funds cannot be provided. The department does hold information relating to individual employer accounts but it would not be appropriate to disclose this information without consulting with employers.
Employers can use their levy funds for apprenticeships in their own business or transfer up to 25% of their funds to other businesses. Funds that levy payers do not draw on are used to fund apprenticeships in small and medium sized businesses who do not pay the levy. Levy payers are not expected to use all funds available to them, though they are able to do so.
The funds in apprenticeship service accounts are available for levy-paying employers to draw on for 24 months before they expire on a rolling, month-by-month basis. The table attached shows the total funds that expired from levy-paying employers apprenticeship service accounts in each month since May 2019. The decline in levy expiry value for October 2021 was due to a delay transferring levy into employer accounts. As a result, employers were granted an additional month to spend those funds, to ensure that the 24-month window to spend funds was maintained.
The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the apprenticeships budget which funds apprenticeships in England for employers of all sizes. As such, expired funds from employers’ accounts do not represent funding that is lost to the system. Rather, the department directs this funding to supporting apprenticeships in small and medium-sized enterprises (SMEs), to English and mathematics training for apprentices and to additional payments to employers, training providers and apprentices. On average, 98% of the English apprenticeships budget has been spent over the last two financial years.
Asked by: Priti Patel (Conservative - Witham)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what the process is for the reallocation of funds in apprenticeship accounts that have expired; and what the destination of those funds were in the latest period for which data is available.
Answered by Robert Halfon
The funds in levy-paying employers’ apprenticeship service accounts are distinct from, and operate on a different basis to, the department’s apprenticeships budget. The former represents funding for apprenticeships notionally available for use by individual levy-paying employers over a two-year period. The latter represents the total amount of funding available annually to support apprenticeships in England for all employers, including those who do not pay the apprenticeship levy.
The funds available to levy-paying employers through their apprenticeship service accounts are notionally hypothecated based on their levy contributions over a two-year period. These funds do not constitute a ‘physical’ pot of money; they should be considered more as credit that is available for each levy-paying employer to use if they wish.
When a levy-paying employer has an employee on an apprenticeship, their account will show their available funds being debited each month to reflect the cost of this training and assessment. In parallel but entirely separately, the training provider receives an equivalent value monthly payment directly from the department’s apprenticeships budget. These payments do not actually come from levy-paying employers’ accounts.
Since available funds in each levy-paying employer’s account are notionally hypothecated, there are no monies to ‘reallocate’ when unused funds expire after 24 months. The credit is either drawn down, and equivalent payments separately made to training providers from the department’s annual budget, or expires when not used and the department’s annual budget remains the same). The government expires funds after 24 months because otherwise levy-paying employers would accrue unreasonably large balances, with the potential to create financial commitments that the government has not planned to meet.
On average, 98% of the English apprenticeships budget has been spent over the last two financial years. If the department’s apprenticeships budget is not fully spent by the end of the financial year, funds are returned to HM Treasury in line with standard practice set out in the Consolidated Budgeting Guidance.
Asked by: Gregory Campbell (Democratic Unionist Party - East Londonderry)
Question to the Northern Ireland Office:
To ask the Secretary of State for Northern Ireland, pursuant to the Answer of 22 February 2023 to Question 146815 on Apprentices: Taxation, which Minister has responsibility for the allocation of the additional funding from the Apprenticeship Levy to Northern Ireland until an Executive is reformed in Northern Ireland.
Answered by Steve Baker - Minister of State (Northern Ireland Office)
The allocation of funding from the UK-wide Apprenticeship Levy is the responsibility of the Department for the Economy in Northern Ireland. The restoration of an Executive, as well as a fully functioning Assembly, is a key priority of the UK Government.
Mentions:
1: Yousaf, Humza (SNP - Glasgow Pollok) Anas Sarwar used to believe in progressive taxation; he now supports tax cuts for the wealthy at the - Speech Link
2: Whittle, Brian (Con - South Scotland) However, there is a severe shortage of apprentices. - Speech Link
3: Yousaf, Humza (SNP - Glasgow Pollok) Whittle for making a suggestion that is well worth exploring, in particular in relation to funding for apprentices - Speech Link
4: Harper, Emma (SNP - South Scotland) be somewhat at odds with the warnings from the Tories and even some Labour members that progressive taxation - Speech Link
Written Evidence Apr. 16 2024
Inquiry: High streets in towns and small citiesFound: challenges to find experienced staff and the fact that recruitment intentions for both staff and apprentices
Mentions:
1: Baroness Vere of Norbiton (Con - Life peer) for employers of employees eligible for NICs relief—the relief for employers of under-21s, under-25 apprentices - Speech Link
2: Baroness Lister of Burtersett (Lab - Life peer) benefit, because it compromises important principles of universality in child benefit and of independent taxation - Speech Link
3: Baroness Vere of Norbiton (Con - Life peer) I am pleased that she agrees about the principle of individual taxation—I know that many people would - Speech Link
Asked by: Emma Lewell-Buck (Labour - South Shields)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 27 June 2023 to Question 190584 on Apprentices: Taxation, how many students were studying at Level (a) 3 and (b) 4 and above in each of the last five years.
Answered by Robert Halfon
The data showing apprenticeship participation for the last five academic years is shown in the table below.
| 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 |
Advanced apprenticeship (level 3) | 372,430 | 356,150 | 338,680 | 326,380 | 330,410 |
Higher apprenticeship (level 4 and above) | 84,240 | 123,950 | 165,510 | 207,860 | 238,820 |
Notes:
(1) 2017/18 to 2021/22 figures cover full academic years volumes.
(2) Volumes are rounded to the nearest 10.
(3) Participation is the count of learners that participated at any point during the year. Learners undertaking more than one course will appear only once in the grand total.
(4) Participation at intermediate, advanced, and higher levels is a count of learners that participated at those levels at any point during the year. Learners undertaking more than one course will only appear once at each level but can appear in the count at more than one level.
Further apprenticeship statistics can be found in the ‘Apprenticeships and traineeships statistics’ publication, available at: https://explore-education-statistics.service.gov.uk/find-statistics/apprenticeships-and-traineeships.
Written Evidence Apr. 29 2024
Committee: Public Accounts CommitteeFound: Since 2021 we have hired over 1,000 apprentices, with an ongoing commitment to hiring an apprentice