Question to the Department for Education:

To ask the Secretary of State for Education, how much of the £600 million apprenticeship levy returned to his Department due to the decrease of apprenticeship starts has been allocated to Birmingham City Council.

The apprenticeship levy is an important part of the government’s reforms to create a high-quality, employer-led apprenticeships system, and it supports employers of all sizes to invest in high-quality apprenticeship training.

The government, via HM Revenue and Customs, collects the apprenticeship levy of 0.5% on total payroll from businesses across the UK with a payroll of more than £3 million. From this, HM Treasury (HMT) sets an English apprenticeships budget for the Department for Education, and the devolved governments receive a share of the funding calculated using the Barnett formula. The department has seen some underspends in the apprenticeships budget in previous years, and these are set out in the department’s annual report and accounts. However, this was not the case in the 2021/22 financial year, when the total spend on apprenticeships in England was £2,455 million, against the budget of £2,466 million, meaning that 99.6% of the apprenticeships budget was spent.

Any underspends in overall departmental budgets by the end of the financial year are first returned to HMT, as per the Consolidated Budgeting Guidance. As employers choose which apprenticeships they offer and when, annual spend of the apprenticeship budget is subject to employer demand.

The apprenticeship system is employer-led, with apprenticeship funding available for both levy-paying employers and smaller employers who do not pay the levy. Apprenticeship funding is, therefore, not allocated to organisations, such as Birmingham City Council, sectors or regions, nor to particular groups of apprentices.

The government is increasing apprenticeship funding to £2.7 billion by the 2024/25 financial year to support apprenticeships growth. The department has also created flexible training models, like flexi-job and accelerated apprenticeships, to make apprenticeships accessible. The BBC are one of our Flexi-Job Apprenticeship Agencies and have launched a training hub in Birmingham to support new apprenticeship starts in the creative sector in the West Midlands. We have also improved the transfer system to make it easier for levy paying employers to find other employers who wish to take on new apprentices with transferred funds.