Apprentices: Taxation

Department for Education written question – answered on 25th February 2020.

Alert me about debates like this

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

To ask Her Majesty's Government what estimate they have made of the average amount spent from apprenticeship levy pots by companies; how much of the apprenticeship levy fund was spent in total in 2019; whether that total represents an (1) overspend, (2) underspend, or (3) spend as forecast; and how the forecast overspend of that fund was calculated.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

To ask Her Majesty's Government what proportion of the apprenticeship levy fund is currently being spent by non-levy payers.

Photo of Baroness Berridge Baroness Berridge Baroness in Waiting (HM Household) (Whip), Parliamentary Under-Secretary (Department for International Trade) (Minister for Women), The Parliamentary Under-Secretary of State for Education

The apprenticeship levy is collected by Her Majesty’s Revenue and Customs (HMRC) from all UK employers with a pay bill above £3 million. Scotland, Wales and Northern Ireland receive a share of levy funding, which increased to £459 million in 2019-20. It is for the devolved administrations to decide how their allocations should be used.

The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the Department for Education’s annual apprenticeships budget, which is set to fund apprenticeships in England only and is set irrespective of actual levy receipts. This budget is used to fund training for new apprenticeship starts in levy and non-levy paying employers and to cover the ongoing costs of apprentices already in training. It is also used to cover the cost of end-point assessment and any additional payments made to employers and providers.

In 2018-19, we spent £1.7 billion of the £2.3 billion ring-fenced budget. The underspend of £489 million against this budget is set out on page 71 of the Education and Skills Funding Agency’s annual report and accounts, published in July 2019 and attached. In 2019-20, our total budget allocation is £2.5 billion. Final end-of-year outturns will be published in the 2019-20 annual report and accounts.

Spending on the apprenticeship programme is demand-led and employers can choose which apprenticeships they offer, how many apprenticeships they offer and when they offer the apprenticeships. We do not anticipate that all employers who pay the levy will need or want to use all the funds available to them but they are able to do so if they wish.

In 2018-19, levy paying employers spent, on average, around 30% of the funds available to them in their apprenticeship service accounts. In the same period, spending on apprenticeship training and assessment in non-levy paying employers was £0.5 billion.

HL1521_HL1522_report (PDF Document, 1.56 MB)

Does this answer the above question?

Yes0 people think so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.