Apprenticeships policy in England

Skills and training are devolved policy areas. This briefing covers apprenticeships in England, and covers policy developments from 2017 onwards.

Apprenticeships in England are available to people over the age of 16 who work in England, and take between one and six years to complete. They are paid jobs which incorporate on and off the job training. Apprentices have the same rights as other employees and are entitled to be paid at least the apprentice rate of the national minimum wage. As of August 2024 around 850 different apprenticeships were available.

Just over 750,000 apprentices participated in an apprenticeship in the 2022-23 academic year.

Apprenticeship levels

Apprenticeships can be studied at different qualification levels, which each have an equivalent educational level:

Apprenticeship standards

Apprenticeship standards outline what an apprentice will be doing in a particular apprenticeship, and the skills that are required of them. Standards are developed by “trailblazer” groups that represent groups of employers and sector organisations, and will always include an end-point assessment.

Standards have replaced apprenticeship frameworks which have been progressively phased out since the 2017/18 academic year. Since August 2020, all new apprenticeship starts have been on standards. Frameworks were developed by sector bodies and were primarily qualification-focused.

Minimum requirements

There are various minimum standards in place to ensure that funding will be provided for an apprenticeship:

• A minimum length of 12 months, which is based on an apprentice working at least 30 hours per week. If the apprentice works fewer than 30 hours per week then the expected duration of the apprenticeship will need to be extended to take account of this.
• Off the job training: an apprentice must spend either 6 hours or more of their usual working hours on off-the job training, or at least 20% of their working time if this is less than 6 hours.
• End-point assessments: All apprentices have to take an independent assessment at the end of their apprenticeship, which will assess the knowledge, skills and behaviours they have developed whilst in the apprenticeship.
• Training to level 2 in Maths and English: Apprentices must be provided with training in English and Maths if they do not hold a level 2 qualification in both subjects. A level 2 apprenticeship can only be completed if the apprentice has achieved a level 1 in both English and maths. A level 3 or higher apprenticeship can only be completed if the apprentice has achieved a level 2 in both English and maths.
• Apprenticeship Agreement and training plan: Apprentices must sign an Apprenticeship Agreement with their employer before the apprenticeship begins, and a training plan with both the apprentice and the training organisation.

The apprenticeship levy

On 6 April 2017 the apprenticeship levy came into effect 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.

The levy is paid into an apprenticeship service account, and the government applies a 10% top-up to the funds that are paid into the account. The funds in this account can only be spent on apprenticeship training and assessment, and expire 24 months after they enter the service account.

Levy-paying employers are able to transfer unused apprenticeship funds to other employers, including to those who do not pay the levy. Since April 2024, employers have been able to transfer a maximum amount of 50% of their annual funds, and can make as many transfers as they wish.

How apprenticeships are funded

Apprenticeships are generally funded in the following way:

• Each apprenticeship standard is associated with a funding band. The upper limit of this band represents the maximum the Government will contribute towards training and assessment costs of the apprenticeship.
• Employers and training providers negotiate a price for training and assessment.
• Apprenticeship levy funds will be used to pay for the training and assessment for employers paying the levy, although only up to the upper limit of the funding band. The employer will need to use other funding for any additional costs.
• Employers who do not pay the levy will pay 5% of the cost of training and assessment with the government contributing the remaining 95%, although again only up to the upper limit of the funding band. They can also use levy funds that have been transferred to them by a levy paying employer.
• Additional payments may be paid to the employer and training provider depending on the characteristics of the apprentice and the type of apprenticeship.

Impact of the funding changes

After the introduction of the apprenticeships levy in 2017 there was a large fall in the number of apprenticeship starts, leading to criticism of the levy and other reforms that have been put in place. The government has responded by stating that the quality of apprenticeships has improved since the reforms have been put in place.

Further concerns have continued to be raised about the levy. These concerns include that it is too complex, inflexible, that other training is being rebadged as apprenticeships and the high drop-out rates from apprenticeships.

Many groups within the apprenticeships and skills sector have called for the apprenticeship levy to be widened so that funding from the levy could also be used on non-apprenticeship training.

Government budget for apprenticeships

The apprenticeship levy is paid by all eligible employers in the UK, although some of the revenue from the levy is devolved to other countries within the UK.

The Treasury allocates an apprenticeship budget to the Department for Education to fund the apprenticeship budget in England. This pays for the training and assessment costs of both levy and non-levy paying employers, and assumes that levy-paying employers will not use all their levy funds.

There was a large underspend in the apprenticeship budget between 2017/18 and 2020/21, but most of the budget has been spent in years since 2020/21.