Asked by: Bill Esterson (Labour - Sefton Central)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she plans to reform the apprenticeship levy.
Answered by Robert Halfon
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 does not currently have any plans to review the apprenticeship levy.
The department is increasing investment in apprenticeships to £2.7 billion by 2024/25 and have a range of work underway to support employers to use our high-quality apprenticeships to the build skilled workforces they need.
There are over 670 employer-designed apprenticeship standards currently available across all levels and sectors and we are encouraging flexible training models, like flexi-job and accelerated apprenticeships, so that employers can train their apprentices in the way that works best for them. We have also improved the levy transfer system to support levy paying employers to make fuller use of their levy funds.
We have removed the limit to the number of apprentices that small and medium-sized enterprises can take on and we continue to pay 95% of their apprenticeship training costs and 100% for the smallest employers when they take on younger apprentices, including those aged 16-to-18.
The department also wants to further accelerate the growth of higher and degree apprenticeships and encourage higher education providers to expand their existing offers or develop new ones. We are 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 our £8 million investment in 2022/23.
Asked by: Toby Perkins (Labour - Chesterfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much was generated by the apprenticeship levy in each year since its creation.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Apprenticeship Levy was introduced in April 2017. Monthly receipts data for the Apprenticeship Levy is published by HM Revenue and Customs in their Tax and NIC Receipts publication which can be found online at:
HMRC tax receipts and National Insurance contributions for the UK - GOV.UK (www.gov.uk)
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government how they will use the underspend of the apprenticeship levy.
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 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, and the devolved governments receive a share of the funding calculated using the Barnett formula.
The department’s apprenticeships budget is used to fund training and assessment for new apprenticeship starts in all employers, levy and non-levy paying employers alike, across England, and to cover the ongoing costs of apprentices already in training and any additional payments made to employers and providers. This means that levy payers’ unspent funds are used to support additional costs and apprenticeships in smaller employers.
In the 2021/22 financial year, 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. Previous years’ spending on apprenticeships is set out in the Department’s Annual Report and Accounts, which can be accessed at: https://www.gov.uk/government/publications/department-for-education-consolidated-annual-report-and-accounts-2021-to-2022.
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 government is increasing apprenticeship funding 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 to support more employers to benefit from the high-quality training that apprenticeships offer.
Asked by: Bridget Phillipson (Labour - Houghton and Sunderland South)
Question to the Department for Education:
To ask the Secretary of State for Education, how much her Department has spent on the 10 percent top-up of apprenticeship levy funds in employer accounts in each of the last five years.
Answered by Robert Halfon
The apprenticeship levy is an important part of the government’s reforms to create a high-quality, employer-led apprenticeships system, and it has supported us to grow the apprenticeship budget to £2.7 billion in 2024/25, for employers of all sizes to invest in high-quality apprenticeship training. There have been over 5.4 million apprenticeship starts since 2010.
The apprenticeship levy is paid by UK employers with an annual pay bill above £3 million, and is collected by HM Revenue and Customs. Employers in England who pay the apprenticeship levy can access funds for apprenticeship training through 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 total of apprenticeship levy funds and the 10% top up form the overall amount available for levy-paying employers to use for training their employees. As such, it is not possible to distinguish what proportion of spend relates to the 10% top up.
Asked by: Lord Knight of Weymouth (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what percentage of the apprenticeship levy in 2021–22 was (1) spent by levy payers on apprenticeships in their own organisations, (2) handed down to supply chain firms to spend on apprenticeships, and (3) spent by His Majesty’s Government on apprenticeships training for SMEs.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The UK Government, via HM Revenue and Customs, collects an apprenticeship levy of 0.5% on total payroll from businesses across the UK with an annual payroll expenditure of more than £3 million.
From this, HM Treasury sets an English apprenticeships budget for the department, and the devolved governments receive a share of the funding calculated using the Barnett formula.
The apprenticeships budget in England is used to fund training and assessment for new apprenticeship starts for all employers of all sizes, both those who pay the levy and those who do not, and to cover the ongoing costs of apprentices already in training and any additional payments made to employers, providers and apprentices. The department’s apprenticeship budget for the 2021/22 financial year was £2,466 million and total spend was £2,455 million, meaning 99.6% of the apprenticeships budget was spent.
The table below shows the percentage of the apprenticeship spend against the budget by levy payers and non-levy payers in the 2021/22 financial year, including the percentage spend by levy paying employers through levy transfers to other employers. It also reflects the spend on apprenticeships that started prior to the introduction of the apprenticeship levy reform, and non-apprenticeships training, such as the cost of running the apprenticeship service, marketing, and communications campaigns.
Apprenticeship Spend | 2021/22 financial year (£ million) | % Spend against Budget |
Levy payers | 1,592 | 65% |
Of which: via levy transfer |
| 2% |
Non-Levy payers | 817 | 33% |
Pre-apprenticeship levy reforms | 7 | 0% |
Non-apprenticeships training spend | 39 | 2% |
Total Spend | 2,455 | 100% |
Asked by: Lord Knight of Weymouth (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they will provide a full breakdown of what the £3.2 billion raised by the apprenticeship levy in 2021–22, as reported by HMRC, has been spent on.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Apprenticeship Levy is a key part of the Government’s reforms to the apprenticeship system to enable employers of all sizes to make a long-term, sustainable and high-quality investment in training.
The Apprenticeship Levy is charged at a rate of 0.5% of an employer’s annual pay bill. An annual Apprenticeship Levy allowance of £15,000 means that only those employers with an annual pay bill of over £3 million will have to pay and report the levy.
In England, the Department for Education is allocated an annual apprenticeships budget which is agreed at Spending Review. This budget is used to fund training and assessment for new apprenticeship starts in all employers – levy and non-levy paying employers alike – across England, and to cover the ongoing costs of apprentices already in training and any additional payments made to employers and providers. This means that in England, levy payers’ unspent funds are used to support additional costs and apprenticeships in smaller employers.
In the 2021-22 financial year 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 are retained in line with standard practice as per the Consolidated Budgeting Guidance.
Apprenticeship policy and spending is devolved meaning the devolved administrations receive funding through the Barnett formula. While the Barnett formula is applied to changes in departmental funding, rather than to budgets for specific programmes, this essentially accounts for how the residual levy revenues are used. It is for the devolved administrations to allocate their funding in devolved areas as they see fit, including investing in their skills programmes.
If the employer is levy-paying, with operations based wholly or partly in Scotland, Wales or Northern Ireland, they will need to engage with the relevant funding authorities for funding apprenticeships located there. Authorities in each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training.
Asked by: Lord Knight of Weymouth (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many companies in England paid the apprenticeship levy in 2021–22.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
There are an estimated 27,300 businesses (rounded to the nearest 100) with headquarters registered in England that paid the Apprenticeship Levy in tax year 2021 to 2022.
Please note that this estimate is based on where employer headquarters are registered, and therefore does not necessarily reflect where the liabilities are accrued. This does not include businesses with headquarters registered in Wales, Scotland, or Northern Ireland, who have a presence and pay employees in England. Meanwhile, this includes businesses with headquarters registered in England, who have a presence and pay employees in Wales, Scotland, or Northern Ireland, but it assumes that the total pay bill is within England.
Asked by: Steve McCabe (Labour - Birmingham, Selly Oak)
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.
Answered by Robert Halfon
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.
Asked by: Emma Lewell-Buck (Labour - South Shields)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she plans to take steps to remove the 12-month minimum course requirement for the use of apprenticeship levy money.
Answered by Robert Halfon
The department is committed to supporting more employers in all sectors to use apprenticeships to develop the skilled workforces they need. The department is committed to supporting more people to benefit from the sustained, high-quality training that apprenticeships offer.
Levy-payers can spend their levy funds on over 660 apprenticeship standards and the department is encouraging more flexible training models so employers can train their apprentices in the ways that work best for them.
The department considers that a period of 24 months before levy funds expire gives employers ample time to plan their apprenticeship programmes and create new apprenticeship opportunities.
The department’s reforms have raised the quality of apprenticeships, giving apprentices confidence that they will receive stretching and sustained training. We continue to support and safeguard apprenticeship quality through several measures, including minimum duration requirements for off-the-job training, provider accountability monitoring, the 12-month minimum period of training, and Ofsted inspection and monitoring visits.
Asked by: Emma Lewell-Buck (Labour - South Shields)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she plans to extend the period of time within which employers can use their apprenticeship levy funds from 24 to 36 months.
Answered by Robert Halfon
The department is committed to supporting more employers in all sectors to use apprenticeships to develop the skilled workforces they need. The department is committed to supporting more people to benefit from the sustained, high-quality training that apprenticeships offer.
Levy-payers can spend their levy funds on over 660 apprenticeship standards and the department is encouraging more flexible training models so employers can train their apprentices in the ways that work best for them.
The department considers that a period of 24 months before levy funds expire gives employers ample time to plan their apprenticeship programmes and create new apprenticeship opportunities.
The department’s reforms have raised the quality of apprenticeships, giving apprentices confidence that they will receive stretching and sustained training. We continue to support and safeguard apprenticeship quality through several measures, including minimum duration requirements for off-the-job training, provider accountability monitoring, the 12-month minimum period of training, and Ofsted inspection and monitoring visits.