Make the most out of your apprenticeship levy

In the last ten years the age demographic of workers in construction has changed. In 2010, 29% of construction workers were aged 50 and over; the latest figures show that ten years on this has increased to 35%. This is not just down to COVID – this trend can be seen to start back in 2015.

As an industry we need do to everything we can to encourage new people into the sector, apprenticeships being a great place to start.

Time and costs will always be a barrier.

Of the apprentice starts in 2019/20 more than 50% were aged 19 and over, meaning the employer would have had to contribute 5% to the course costs, on top of all the other direct and indirect costs associated with employing an apprentice.

Large employers paid £2.9 billion in the Apprentice Levy between March 2020 and February 2021. Over the same period, £1.3 billion of unspent funds ‘expired’ and returned to the central pot.

Each year Apprentice Levy payers can transfer up to 25% of their levy to other firms, but most don’t. A FOI request submitted by Hudson revealed that since the levy transfer limit was increased to 25% in April 2019, only 3.2% of registered accounts on the Apprenticeship Service had used some or all of their transfer pot.

The maximum potential value of the available levy transfer by financial year, across all registered accounts on the Apprenticeship Service, was £597m in FY19-20 and £621m in FY20-21.

The amount used in levy transfers between April 2019 and February 2021 was £30m. This figure represents the value of funds transferred to pay for training delivered during this period. For apprenticeships which continue beyond this period, employers will have committed to fund them via a transfer and the balance of transferred funds will be drawn down monthly as training is delivered.

The Education and Skills Funding Agency said: 

Since we have increased the amount that levy payers can transfer we are seeing numbers of transfers rise steadily, but we know the process needs to be made easier.

How levy payers can help

• Get in touch with your local colleges and training providers, let them know that you have funds available for a levy transfer. You can discuss which industry, trades and apprenticeship levels you would be happy to fund from your Apprentice Levy.
• Speak to companies in your supply chain, and consider if you could help them and support an apprentice.
• Get in touch with a Shared Apprenticeship Scheme. These enterprises employ and support the apprentice on behalf of a host firm or firms. These not-for-profit organisations provide support for both the apprentice and the construction firm. Seven organisations cover England and Wales.

How a levy transfer works

If you pay the apprentice levy you can transfer up to 25% of your pot to fund training for other apprentices, enabling you to keep the funds in a sector that is relevant to you. The amount of your transfer pot is visible in your digital apprenticeship service account, and there is a handy calculator tool to stop yourself from overcommitting. Once you have agreed the transfer you will need the ID of the employer you are transferring the funds to; you add the name into your DAS, the employer accepts and the funding is taken each month. No further action is needed by you as the levy payer.

The ESFA has published a video which takes you through steps, but once you have done it for the first time it is easy to administer.

I hope this helps and if you have any questions, please contact me on 01262 401040.

• Hudson is pleased to have opened a partnership scheme with Leeds City Council under which five thousand pounds in grants have enabled three apprentices to begin a career in construction.
• Outside of the National Apprentice scheme, we run our own apprentice sponsorship scheme which has supported 170 apprentices on the East Coast of Yorkshire in the past ten years.