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Apprenticeship Levy — [Caroline Nokes in the Chair]

Part of the debate – in Westminster Hall at 2:30 pm on 11th February 2020.

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Photo of Richard Graham Richard Graham Conservative, Gloucester 2:30 pm, 11th February 2020

The hon. Lady is absolutely right in one way, but of course a lot has changed relatively recently. Levy employers can now transfer 25% of their levy to other organisations, and the obvious opportunity there is to do it through their supply chain. For example, in a briefing I received from it in November, Tesco said it contributed roughly £20 million a year to the apprenticeship levy but that it is able to spend only about 15% of it, due to the inflexibility of the system. We will come on to the inflexibility of the system, but the key thing is that there is now this opportunity for Tesco to deploy a quarter of its levy, which would be £5 million, to some of the companies in its supply chain, which are typically SMEs. That is incredibly valuable, and I hope it is something that Tesco has taken up.

As a result of the hon. Lady’s question, I hope that other levy employers out there will be more aware of this opportunity. Business West asked a very similar question of the previous Minister with responsibility for apprenticeships:

“What would you advise colleges to do in September if they have gone over their non-Levy allocation and have 16 year olds wanting to start an apprenticeship with a non-Levy employer?”

The previous Minister—the former right hon. Member for Guildford—replied:

“I would approach the larger Levy paying firms in the area…There are lots of Levy payers who have not spent their levy pots.”

That is quite true; the question is whether it is as well-known as it should be. I know of examples from Gloucestershire Engineering Training where our county council and I think another public sector employer have used part of their levy to help an SME to ensure that its apprentice receives the training they need. However, such opportunities are not as widely known about as they should be.