DfE’s revised 2023-24 apprenticeship budget was ‘99% spent’

England’s apprenticeship budget was 99 per cent spent last year after a chunky in-year cut, new figures show.

FE Week previously reported that the Department for Education surrendered £60 million of its £2.585 billion ring-fenced apprenticeship budget in the 2023-24 financial year to Treasury.

Of the revised budget of £2.525 billion, a total of £16 million ended up going unspent. This amount was again returned to Treasury.

The figures, released by skills minister Jacqui Smith in response to a parliament question, show that 28 per cent of the budget, £695 million, was spent by small and medium-sized employers.

And 2 per cent, £53 million, was forked out for non-delivery costs, including running digital services and marketing and communications campaigns.

Labour is reforming the apprenticeship levy into a growth and skills levy so that funds can be used for some non-apprenticeship training.

To free up space in the budget, the government is planning to remove level 7 apprenticeships from the scope of levy funding. An announcement on the scale of the removal of level 7 apprenticeships is expected shortly.

Treasury documents show that the levy generated £3.841 billion from employers who pay the levy between April 2023 and March 2024.

When DfE’s ring-fenced budget spend on apprenticeships in England is combined with the £500 million-odd that is handed to the devolved nations from the levy, it leaves more than £800 million that was raised by the levy but held onto by the Treasury in 2023-24.

The DfE’s supplementary estimates suggest its apprenticeship budget for 2024-25 rose by £204 million to £2.73 billion.

Addressing tight apprenticeship spending at yesterday’s Apprenticeships and Training Conference, the DfE’s apprenticeships director Kate Ridley-Pepper said: “Now, as you know, with stretched public finances and 99 per cent of the apprenticeship budget spent last year, there are also some tough choices to make on what we can fund in the future in order to support ministers commitments to rebalance the programme towards younger people, including through foundation apprenticeships, and to continue to support SMEs, who deliver so much for our economy and who around a third of our apprenticeship budget is spent on. 

“We want to make clear that large employers levy contributions are not wasted when they are not used, but that they go towards supporting apprenticeships that are valued and vital SMEs, and we recognize the need for clarity so that you can plan delivery. 

“And I’m grateful for your patience as we continue to work quickly to announce a decision on level seven apprenticeships.”