Levy-lockout update: Employers lose access to £37 million from first 2 months

Employers lost access to £26 million of their apprenticeship levy funds in June, the skills minister has revealed.

The figure, revealed in an answer to a parliamentary question from Catherine McKinnell, the MP for Newcastle upon Tyne North, means that a “staggering” £37 million has been clawed back by government after the first two months that levy funds can expire from employers’ accounts.

As per levy rules, big businesses with a payroll of £3 million or more who pay into the pot have a 24-month limit to spend their funds.

Once that time is up, the funds will expire on a month-by-month basis.

Last month, it was revealed that £11 million was lost in May – the first sun-setting period for the policy.

This amounted for 8 per cent of the £135 million employers paid in May 2017.

There are no figures available for how much employers paid into their levy accounts in June 2017.

Skills Minister Anne Milton told McKinnell: “As well as funding apprenticeships in levy-paying employers, levy contributions are also used to fund training for existing apprenticeship learners and new apprenticeships in non-levy paying employers.

“We do not anticipate that all employers who pay the levy will need or want to use all the funds in their accounts, however they are able to do this.”

McKinnell, who chairs the All-party Parliamentary Group on Apprenticeships, reacted on Twitter saying it is “increasingly pressing” that the government looks at innovative ways of using unspent levy funds after a “staggering” £37 million has already been clawed back by government”.