Effectiveness of the apprenticeship levy

The apprenticeship levy was introduced in April 2017, with all UK employers with a pay bill of over £3 million per year paying the levy. The levy is set at 0.5% of the value of the employer’s pay bill, minus an apprenticeship levy allowance of £15,000 per financial year. It is paid into an apprenticeship service account, and funds in this account have to be spent on apprenticeship training and assessment.

At the time it was introduced, the (then) Government stated that the levy “will allow us to double investment in apprenticeships by 2020 from 2010 levels, to £2.5bn [per year]”.

Since the levy was introduced the number of apprenticeship starts has fallen, and various concerns have been raised regarding the effectiveness of the levy.

The Conservative manifesto for the 2019 election stated that the Government will look at how the Apprenticeship Levy can be improved, and the Prime Minister confirmed in Prime Minister Questions on the 15^th January 2020 that the levy will be reformed.