The Apprenticeship Levy scheme has discouraged businesses from offering apprenticeships due to its strict requirements. Established in 2017, the levy applies to payrolls over £3million, and funds expire if unused within two years. In 2022, studies revealed that over £3 billion of levy funds had expired, indicating underutilization. The scheme requires significant 'off the job' training, limiting apprentices' working hours. Relaxing the scheme could improve access for struggling sectors and address high employment costs for lower-paid employees, amid rising national insurance and living wage increases.
"The Apprenticeship Levy was established in 2017 to help and encourage employers to take on apprentices. A levy of 0.5% of wages was applied to payrolls greater than £3million, to be used by all employers who had appropriate qualifying apprenticeship training."
"Studies in 2022 indicated that over £3 billion of levy funds were expired at that date, representing an additional tax take for the government."
"The funds were likely unused because of the strict requirements of how much 'off the job' training apprentices must do, reducing the working hours they can do for their employer."
"While the public purse is tight, some relaxation of the rigidity of the scheme, to allow easier access to levy funding for struggling sectors such as retail and hospitality, would be welcome."
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