To ask the Secretary of State for Education, if he will make an assessment of the implications for his policies of the October 2019 report Learning and Work Institute report, Bridging the Gap: next steps for the apprenticeship levy, which has found that the levy fund could be overspent by £1 billion in the next year.
The apprenticeship levy is collected by HM Revenue and Customs from all UK employers with a pay bill above £3 million. Separately, HM Treasury sets the Department for Education a fixed, annual budget for apprenticeships in England. This budget is distinct from the levy and is used to fund new apprenticeship starts for both levy and non-levy paying employers, and must also cover the ongoing costs of apprentices already in training.
We welcome employers designing higher-level apprenticeships which are longer and require more off-the-job training. However, we are conscious that this will increase costs in the longer-term. In 2019-20, funding available for investment in apprenticeships in England is over £2.5 billion and we expect to remain within budget this financial year. The recent spending settlement has set the department’s budget for 2020-21. We keep apprenticeships funding policy under review to ensure that apprenticeships continue to be affordable and offer value for money for the taxpayer. We will consider how apprenticeships can continue to meet the changing needs of employers as part of the forthcoming Spending Review.