Asked by: Priti Patel (Conservative - Witham)
Question to the Department for Education:
To ask the Secretary of State for Education, what estimate she has made of the (a) amount raised through the apprenticeship levy and (b) number of apprenticeship levy service accounts in each year since its introduction.
Answered by Robert Halfon
The apprenticeship levy is a key part of the government’s reforms to the apprenticeship system and enables employers of all sizes to make a long-term, sustainable and high-quality investment in training. Monthly receipts data for the apprenticeship levy is published by HM Revenue and Customs in their tax and national insurance contributions receipts publication, which can be found at: https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk.
The table below shows the total number of levy-paying employer accounts created on the apprenticeship service in each financial yearsince its introduction in the 2016/17 financial year. It is pleasing to see annual increases in the number of levy-paying employers registering an account on the apprenticeship service.
FY | New accounts created | Total accounts (cumulative) |
2016/17 | 4,630 | 4,630 |
2017/18 | 8,640 | 13,270 |
2018/19 | 2,970 | 16,240 |
2019/20 | 2,030 | 18,270 |
2020/21 | 1,870 | 20,140 |
2021/22 | 1,920 | 22,060 |
2022/23 | 1,280 | 23,340 |
2023/24 | 750 | 24,090 |
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the Department for Education:
To ask the Secretary of State for Education, what recent assessment she has made of the impact of the apprenticeship levy on the uptake of apprenticeships.
Answered by Robert Halfon
Since 2010, there have been over 5.5 million apprenticeship starts. During that time, the department has built a new skills system from the ground up which better meets the needs of employers and apprentices today.
The apprenticeship levy was introduced in 2017 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.
There have been over 2.2 million apprenticeship starts in employers of all sizes across England since the levy was introduced. There are now over 680 high quality standards available from entry level right through to masters level, with over 5,000 employers involved in their development. There is now a much broader range of apprenticeships than ever before in occupations such as architect, cyber security, and nursing, in addition to traditional occupations like bricklayer, plumber, or hairdresser.
More apprentices are now taking higher level subjects linked to higher paid jobs in key areas. Starts on higher apprenticeships at Level 4 and above have more than doubled, from 48,150 in the 2017/18 academic year to 106,360 in the 2021/22 academic year. The department has also seen year-on-year growth of degree level apprenticeships with almost 196,000 starts since their introduction in 2014. The department is providing an additional £40 million over the next two years to support degree apprenticeship providers to expand and help more people access them.
The apprenticeship levy has enabled the government to increase investment in the apprenticeships system in England, reaching £2.7 billion by the 2024/25 financial year. In the past two financial years, on average 98% of the English apprenticeship budget was spent showing strong demand by employers for high quality apprenticeships training. Large employers can use their levy contributions to fund apprenticeships in their own business, or they can transfer their funds to other businesses in their supply chain, sector or region. Funds that levy payers do not draw on are used to fund apprenticeship training in small and medium sized businesses which allows employers of all sizes to benefit from training apprentices.
Asked by: Baroness O'Neill of Bexley (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what steps they are taking to ensure that Apprenticeship Levy funding is used in its entirety rather than being returned to His Majesty's Treasury.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
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 levy is enabling the department to increase investment in apprenticeships to £2.7 billion by 2024/25, encouraging more employers across the country to recruit new apprentices.
In the last two financial years, on average, 98% of the English apprenticeships budget was spent. Where large employers do not make full use of their levy funds, the department reinvests this money to support apprenticeships in small and medium-sized employers who do not pay the levy. It is therefore important that the apprenticeships budget remains ring-fenced to support the demand by employers for high-quality apprenticeship training.
To make it easier for employers to make full use of their levy contributions, the department has created flexible training models, such as flexi-job and accelerated apprenticeships, to make apprenticeships more accessible for employers. The department has 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.
The department has worked with employers to develop over 680 high-quality apprenticeship standards, and the Institute for Apprenticeships and Technical Education will review the content of 100 apprenticeship standards in sectors like construction and healthcare by the end of December 2023, so they reflect the latest technological developments.
The department is also providing an additional £40 million over the next two years to support degree apprenticeship providers to expand and help more people access this provision, on top of its £8 million investment in 2022/23.
The department continues to promote apprenticeships to young people in schools and further education colleges across the country through its Apprenticeship Support and Knowledge programme, and UCAS are expanding its service to allowing students to search for and apply to apprenticeships alongside degrees.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she has had discussions with the Secretary of State for Transport on reform of the Apprenticeship Levy to support training needs in the road haulage sector.
Answered by Robert Halfon
This department continues to work closely with the Department for Transport and across government to ensure that the road haulage sector has access to the skills training that employers need. This engagement has led to important improvements to apprenticeships and skills bootcamps. My right hon. Friend, the Secretary of State for Education has not met with my right hon. Friend, the Secretary of State for Transport to discuss reform of the apprenticeship levy.
The apprenticeship levy has enabled the department to increase investment to a total of £2.7 billion by 2024/25, which will support apprenticeship starts across every sector, including road haulage. The Institute for Apprenticeships and Technical Education regularly reviews the funding for apprenticeship standards. The department has recently increased funding for the heavy goods vehicle service and maintenance technician apprenticeship standard by 33% (from £15,000 to £20,000), the large goods vehicle apprenticeship standard by 14% (£7,000 to £8,000) and the motor vehicle service technician apprenticeship standard by 7% (£15,000 to £16,000). These increases are supporting providers deliver essential training across the sector.
In response to supply issues for driver training and testing in the transport sector, the department also introduced temporary arrangements through the apprenticeship system, so that more providers could deliver training and testing for the acquisition of a driving license.
Skills bootcamps are also providing opportunities for people to train as drivers, gain their licenses and launch new careers in road haulage sector. The department has invested up to £32 million to create up to 11,000 HGV driver training places, with further funding being allocated to support this training offer in the 2023/24 financial year.
Asked by: Tom Hunt (Conservative - Ipswich)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department made an assessment of the potential merits of introducing a reduced apprenticeship levy contribution for companies which take on apprentices with SEND.
Answered by Laura Trott - Chief Secretary to the Treasury
The government keeps all taxes under review.
Asked by: Jonathan Gullis (Conservative - Stoke-on-Trent North)
Question to the Department for Education:
To ask the Secretary of State for Education, if she will consider the potential merits of using the apprenticeship levy to fund training in skill shortages identified by the Migration Advisory Committee.
Answered by Robert Halfon
The government is supporting employers of all sizes and in all sectors, to use high-quality apprenticeships to build the skilled workforces they need, now and in the future.
Employers can access over 680 employer-designed apprenticeship standards, including in occupations which feature in the shortage occupation list, such as Level 2 Bricklayer, Level 3 Laboratory Technician, and Level 3 Lead Adult Care Worker.
The department is increasing investment in apprenticeships to £2.7 billion by the 2024/25 financial year and has removed the limit on the number of apprentices that small and medium-sized enterprises can recruit, supporting more employers of all sizes to grow their businesses with the skilled apprentices they need.
Employers can also continue to benefit from a range of other high-quality government funded skills programmes to recruit new talent or train current staff, including to help address skills shortages identified by the Migration Advisory Committee, such as through Skills Bootcamps in retrofitting.
Asked by: Jonathan Gullis (Conservative - Stoke-on-Trent North)
Question to the Department for Education:
To ask the Secretary of State for Education, if she will consider the potential merits of increasing the apprenticeship levy transfer ceiling to 35%.
Answered by Robert Halfon
The department is supporting employers to make greater use of their levy and has improved the transfer system to make it easier to find other employers who wish to take on apprentices with transferred funds. Levy transfers are a great way for employers to transfer their funds to other employers in their supply chains, including small employers, flexi-job apprenticeship agencies and charities to help meet local or sector-specific needs.
Levy-paying employers have been able to transfer 25% of their annual funds since April 2019, when this was increased from 10%, and have been able to use an online service since 2021 to make the process easier.
Since the new service launched in September 2021, we have seen 418 employers, including ASDA, HomeServe and BT Group, pledge to transfer over £28 million to support apprenticeships in businesses of all sizes as of 9 June 2023.
Small and medium sized enterprises (SMEs) can also access funding directly from the apprenticeships budget. The department is working to remove unnecessary barriers, making it simpler and quicker for them to set up an apprenticeship service account, to access funding and to support them to take on their first apprentice. The department has also removed the limit of 10 apprentices a year that SMEs can take on, enabling them to take on as many skilled apprentices as they need.
Asked by: Simon Jupp (Conservative - East Devon)
Question to the Department for Education:
To ask the Secretary of State for Education, if her Department will make an estimate of the potential impact on (a) the apprenticeship budget and (b) apprenticeship starts of permitting levy-payers to spend (i) 25% and (ii) 50% of their apprenticeship levy accounts on non-apprenticeship training.
Answered by Robert Halfon
In the last two financial years, an average 98% of the English apprenticeships budget was spent. The apprenticeships budget in England is ring-fenced for apprenticeships only and is used to fund training and assessment for all employers, both those who pay the levy and those who do not. It is therefore important that the apprenticeships budget remains ring-fenced for apprenticeships to ensure continued affordability of the programme and to ensure that employers of all sizes, including small and medium sized enterprises (SMEs) that do not pay the levy, can continue to access high-quality apprenticeships training.
If employers were able to use 25% of their levy funds for non-apprenticeships training, the department estimates that this would create an additional cost of up to approximately £700 million per annum. Allowing employers to use up to 50% of their funds for non-apprenticeship training would increase this cost to up to £1.5 billion per annum. Without making additional funding available to support this flexible use of levy funds, the department estimates that this would require a significant reduction in new apprenticeship starts to approximately 140,000 per annum. This is around a 60% decrease on the 350,000 apprenticeship starts reported for the 2021/22 academic year.
The apprenticeship levy was introduced to increase employer investment in high-quality apprenticeships training, and with the intention that large employers’ levy contributions would fund access to apprenticeships for all employers. The Government wants to support SMEs across England to offer more apprenticeship opportunities and so in April we removed the restriction on the number of apprentices SMEs can recruit. The department continues to pay for 95% of the apprentice training costs for SMEs, rising to 100% for the smallest employers recruiting apprentices under the age of 19.
Employers can already choose to spend their levy funds on any of the 680 plus apprenticeship standards available, or to transfer 25% of their funds to support apprenticeships in other businesses. They can also benefit from a range of other government-funded skills programmes, including skills bootcamps, higher technical qualifications and T Level industry placements.
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.
Asked by: Abena Oppong-Asare (Labour - Erith and Thamesmead)
Question to the Department for Education:
To ask the Secretary of State for Education, whether her Department has made an assessment of the adequacy of the accessibility of the apprenticeship levy for (a) construction and (b) trade businesses.
Answered by Robert Halfon
The apprenticeship levy enables large employers to access up to 110% of their levy contributions for high-quality apprenticeships, which can equip them with the skills they need to develop and grow their workforce. It also enables the government to fund 95% of the cost of apprenticeships in small employers who do not pay the levy.
We are increasing apprenticeship funding in England to £2.7 billion by 2024/25, which will support even more people to access apprenticeships, and we have introduced flexi-job apprenticeships, making it easier for apprentices to complete their training across different projects.
We are working across government and in partnership with the construction industry, through the Construction Skills Delivery Group, to ensure apprenticeships meet the needs of employers in the sector. In 2021/22 there were over 26,000 apprenticeships starts in Construction, Planning and the Built Environment sector, an increase of 31% from 2020/21.
Employers have developed 97 standards in the Construction and the Built Environment sector including Level 2 bricklayer, Level 3 craft carpentry and joinery and the Level 6 chartered surveyor degree apprenticeships. A new version of the bricklayer standard also went live in August 2023, with funding increased by 40%, and we have increased funding for the scaffolder apprenticeship by over 20%.
We have made it easier for SMEs in construction to recruit the next generation of talent by removing the limit on the number of apprentices they can take on. We also meet 100% of the cost for the smallest employers (fewer than 50 staff) when they take on young apprentices and have simplified our levy transfer system so SMEs can more easily benefit from transferred funds.