ESFA seeking views on 'long-term operation' of apprenticeship levy

The Education and Skills Funding Agency is seeking employers’ and providers’ views on the long-term operation of the apprenticeship levy, almost two years after it was introduced.

Employers can now email their “thoughts and feedback” to the agency, and it will launch a short survey in the “coming weeks”, according to today’s business update.

The survey will “offer an opportunity to comment on how employers have responded to the introduction of the levy, and how we can help develop demand for, and provision of, apprenticeships”.

“In the meantime, we have set up an additional mailbox where we encourage employers to share their thoughts and feedback. Please email apprenticeships.feedback@education.gov.uk.”

The apprenticeship levy came into effect in May 2017, and is set at 0.5 per cent of an employer’s payroll over £3 million.

Money raised through the levy is used to fund all apprenticeship training in England– with the exception of the 10 per cent co-investment paid by smaller employers that aren’t subject to the levy.

Since the levy was introduced apprenticeship starts have fallen, with numbers down nearly a quarter in 2017/18 compared with the year before.

FE Week reported in November that employers had used just under 14 per cent of their levy funds to date, with £370 million out of a total £2.7 billion drawn down – although this is just one cost that the levy is expected to cover.

But the Institute for Apprenticeships has warned that the budget is set to be overspent by £500 million this year, which is understood to be the result of higher per-start funding than first predicted, largely driven by the sharp rise in management apprenticeships with high prices.

Skills minister Anne Milton said in December that she will “look at whether it is right” for the government to “continue to fund all apprenticeships”.

“We will need to look ahead, when the system is really running well – and I think we’re nearly at that stage – when we need to look at do we continue to fund apprenticeships for people who are already in work, people doing second degrees,” she told Association of Colleges’ boss David Hughes, as part of a wide-ranging interview.