Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, if he will publish from May 2019 the monthly (a) proportion and (b) amount of unused apprenticeship levy following the expiry of the two-year period for its use.
Answered by Anne Milton
When employers pay the Apprenticeship Levy, their contribution (as well as a 10% top up) is made available to them via the digital apprenticeship service to spend on apprenticeships in England.
We recognise that employers want and need flexibility. Employers have 24 months to spend their levy and levy-paying employers can transfer 25% of funds to other employers.
The amount of funds entering employers’ digital apprenticeship service accounts in May 2017 was £135 million, of which £11 million in unspent funds expired in May 2019. This was the first month of expiry of funds. The amount of funds entering employer’ accounts in June 2017 was £152 million, for which the expiry of unspent funds will occur at the end of June 2019.
These figures are for employers in England and include the 10% government top up. The proportion of an employer’s levy contributions made available as funds in their digital apprenticeship service account depends on how many of their employees live in England and the proportion of their pay bill paid to these employees.
Unspent funds are used to support existing apprenticeships learners, levy paying employers who spend more than the funds available in their accounts and to fund training for non-levy paying employers.
We do not currently intend to publish expiry of funds information on a monthly basis.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, when the new EdTech Leadership Group will be convened; and how the leadership group will be selected.
Answered by Nick Gibb
The EdTech Leadership Group is due to convene for the first time before summer recess.
Members of the group have been selected on the basis of their experience and ability to influence either the education technology industry or the education sector to further the aims of the Government’s education technology strategy. Members were also selected to ensure a balance of experience between the technology industry and education sectors (ensuring representation across different age-phases of education).
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, with reference to the National Audit Office report, The apprenticeships programme, published on 6 March 2019, HC 1987, what assessment he has made of the future financial sustainability of the apprenticeship levy; and if he will make a statement.
Answered by Anne Milton
The apprenticeship levy is collected by HM Revenue and Customs from all UK employers with a pay bill above £3 million.
Separately, HM Treasury have set the Department for Education a budget for apprenticeships in England for the current Spending Review period (to 2019-20). This budget is distinct from the levy and is not dependent on receipts from the levy. This budget is used to fund new apprenticeship starts for both levy and non-levy paying employers and must also cover the ongoing costs of apprentices that are already in training.
In 2019-20 funding available for investment in apprenticeships in England is over £2.5 billion, double what was spent in 2010-11.
Currently, we expect to remain within budget in this spending review period to the end of the 2019-20 financial year. A detailed breakdown of spending for 2018-19 will be published in the Education and Skills Funding Agency Annual Report and Accounts.
The level of funding for the apprenticeship programme beyond 2019-20 will be determined by the forthcoming Spending Review.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 23 April 2019 to Question 243426, what estimate his Department has made of the proportion of levy funds in employers’ accounts that will (a) expire and (b) be spent on apprenticeships before they expire; and if he will make a statement.
Answered by Anne Milton
Levy-paying employers have up to 24 months from the point at which funds enter their account to spend the funds available. The 24 month expiry period is designed to give employers time to develop their apprenticeship programmes whilst encouraging employers to take action to create new apprenticeship opportunities. Funds will only expire on a month by month basis from May 2019 if an employer has spent less on apprenticeship training and assessment in the past 2 years than the amount that went into their account in May 2017.
We do not anticipate that all levy-payers will use all the funds in their accounts, though they are able to. Income from the levy is used to fund apprenticeship training for both levy paying and non-levy paying employers.
Levy-paying employers are now able to transfer up to 25% of the annual value of their levy funds to other employers.
In May 2019, the 24-month expiry date will be reached for the earliest declared levy funds. We forecast that when the first ‘expiry’ period arrives in May, approximately £12 million pounds will remain unspent, representing 9% of the total levy funding that employers collectively paid in April 2017.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, how many apprenticeships there are in non-levy paying businesses; what other Government programmes will be funded by expired apprenticeship levy funds; and if he will make a statement.
Answered by Anne Milton
In the first half of 2018/19 academic year there have been 214,200 apprenticeship starts reported to date. Of these, 105,700 (49%) starts have been directly supported by funds from levy payer’s apprenticeship service accounts. There have also been 108,500 (51%) starts which have not been supported directly by levy funds, and the majority of these starts will be with non levy-paying employers.
We publish data on apprenticeship starts on a monthly basis at:
https://www.gov.uk/government/collections/further-education-and-skills-statistical-first-release-sfr.
In the 2019-20 financial year, the annual funding allocated to the Department for Education for apprenticeships in England is over £2.5 billion. This funding is distinct from levy receipts and is used to fund new apprenticeship starts for both levy and non-levy paying employers, and to cover the ongoing costs of apprentices that are already in training. It is therefore not possible to provide data on how many apprenticeship starts have been funded by unspent employer levy funds as all apprenticeship starts are funded from the Department for Education’s budget. At present, there are no plans to spend expired levy funds on programmes other than apprenticeships.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, whether he has received representations from employers on the effect of the 20 per cent off-the-job training standard on delivering apprenticeships.
Answered by Anne Milton
The requirement for a minimum of 20% off-the-job training is an important quality requirement and one of the core, longstanding principles of an apprenticeship.
We work with employer representative bodies to ensure policy and funding rules are well understood and to gain insight into how apprenticeships are being delivered. There are a number of employers represented on our Apprenticeships Stakeholder Board where the off-the-job training has been discussed. The effect of the 20% off-the-job training standard is frequently raised with me when I meet businesses.
We have recently issued updated off-the-job training guidance and products to support employers, training providers and apprentices to understand what good off-the-job training looks like and the benefits of it. These were developed in response to employer feedback and were tested with stakeholders prior to publication.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 23 April 2019 to Question 243426 on apprenticeships: Taxation, what steps his Department is taking to increase the amount of apprenticeship levy funds that employers are using; and if he will make a statement.
Answered by Anne Milton
We continue to work with levy-paying employers to make sure that they can make the most of the opportunities that our reforms present, and we’ve responded to their feedback. In April 2019, we increased the amount that levy-payers can transfer to smaller employers or other organisations from 10 to 25% of their funds each year, helping them use their levy funds to support apprenticeship starts in their supply chain or meet local skills shortages.
The number of employer-designed apprenticeship standards available now stands at 440, giving employers more choice than ever and allowing them to spend their levy funds to develop the skills they need.
Since April 2016, we have provided ongoing face-to-face support for over 1,100 of the largest levy-paying employers through our national account managers. Since April 2018, we have extended support over the phone to a further 3,500 large levy-paying employers. Our support focuses on helping these businesses to build large-scale, high-quality programmes that deliver a return on their investment.
We have also led a major awareness-raising campaign among the remaining levy-paying employers, raising awareness of the opportunity to utilise their investment and helping them understand how to use transfers.
Asked by: Nicholas Dakin (Labour - Scunthorpe)
Question to the Department for Education:
To ask the Secretary of State for Education, what estimate he has made of the proportion of employer apprenticeship levy funds that will be used in (a) 2019, (b) 2020, (c) 2021 and (d) 2022; and if he will make a statement.
Answered by Anne Milton
Since 2017, we have introduced substantial changes to the apprenticeship funding system that make it challenging to predict the proportion of levy funds that will be used this year and over the next few years.
The apprenticeships system is now employer-led and so employers can choose which apprenticeships they offer and when. This means that the use of levy funds is a matter for individual employers. We do not expect employers to use all of their levy funds, but they are able to.
The provider and employer market continues to adapt to the reforms to the apprenticeships system that were made in 2017. We have also made additional changes to funding policy this year, increasing the cap on transfers from 10% to 25% and are reducing co-investment for small employers from 10% to 5%. The effect of these changes on behaviour will only become apparent in the future.
In combination, these factors mean that it is not possible to make a single reliable estimate of future levy usage.
When the reforms were designed, we estimated that employers would use around half of the levy funds available to them, on average, once the changes to the apprenticeships programme had bedded in. However, levy-paying employers have taken on fewer starts and used a smaller proportion of their levy funds than anticipated. Nevertheless, we expect employers to use an increasing proportion of their levy funds as they continue to develop their use of apprenticeships, and as a consequence of employers choosing more higher-cost, higher-level apprenticeships since 2017.
The forthcoming Spending Review, announced by my right hon. Friend, the Chancellor of the Exchequer at Spring Statement, will determine the level of funding for the apprenticeship programme from April 2020. As part of this process we will consider any changes that may be required to future funding arrangements, and the impact this might have on employers’ use of their levy funds. Until then it is not possible to estimate employers’ use of their levy funds from 2020 onwards.