Unused Apprenticeship Levy Funds May Be Challenge For New PM

The apprenticeship levy was designed to provide funding for more young people to be trained, but new research has found large amounts of funding have gone unspent and been returned to the government.

According to the London Progression Collaboration (LPC), which was created by the IPPR thinktank, employers have collectively returned £3.3 billion of unspent funds to the Treasury since 2019, the equivalent of £95 million a month.

While factors like the pandemic may have contributed to a lower number of apprenticeships as firms wrestled with the disruption caused, the fact remains that these are opportunities missed for many.

For that reason, firms and aspiring apprentices alike may want to focus afresh on the opportunities apprenticeship levy providers can offer now that the pandemic has eased.

Speaking to HR Magazine, LPC director Anna Ambrose said the funding situation could be helped through more transparency on behalf of the government, commenting: “This could go some way to giving businesses certainty and ensuring that levy funds are spent on the places and people that need it most.”

She suggested that small and medium sized enterprises (SMEs) should be the main beneficiaries of a reallocation of these returned funds to enable them to set up more apprenticeships.

At the moment, she said, while the money should in theory be recycled and used to help SMEs in this way, the system is currently too “opaque” to provide any certainty about these funds.

The man in charge of the Treasury for much of this time, former chancellor Rishi Sunak, may be in a strong position to do something about the funding situation if he wins the race to become Conservative Party leader and prime minister.

Both he and rival Liz Truss have made a commitment to continuing the ‘levelling up’ agenda championed by Boris Johnson, which means much consideration may be given to the role apprenticeships can create in developing more opportunities for the young workforce in areas undergoing economic renewal.