Co-op urges firms to support the young as £96m of apprenticeship levy funds unspent

The Co-op said the figures show private and public sector organisations should work together to ensure the levy is used more effectively to support young people

A study has uncovered that a huge £96m of apprenticeship levy funds remained untouched during the 2022/23 tax year.

The Co-op highlighted this as a clear sign that private and public sector organisations need to co-operate more effectively in using this levy to benefit the nation's youth. Several business groups have been pressing for changes in the way the levy, collected from large companies with an intention to create more apprentice positions, is managed.

The Co-op emphasised that the unspent sum could have supported over 9,000 apprenticeships across both private and public sectors. The Co-op noted that the total of untouched funds had seen a "significant" surge, from a mere £11 million in 2021/22.

It concluded that strain on financial resources in local governments, charities and healthcare organisations could have reduced the willingness or ability to invest in apprenticeship training. The Co-op put forth a solution, advocating for companies to ponder on rerouting their surplus apprenticeship levy funds towards levy share programmes.

These programmes enable businesses to allocate up to a quarter of their unused funds rather than returning them to the Treasury. In response to these findings, Claire Costello, Co-op's Chief of People and Inclusion Officer, urged: "We urge every organisation that finds itself with excess apprenticeship levy funds to consider supporting a levy share initiative."

"By doing so they can play a crucial role in supporting the creation of roles for people both starting out in their professional careers, and those with experience already under their belt, to get into purposeful careers at organisations that might otherwise be struggling with limited budgets in 2024."

A spokesperson from the Department for Education stated: "The apprenticeship levy has enabled us to increase investment in apprenticeships to £2.7bn a year in 2024-25 supporting employers of all sizes and in all sectors offer more apprenticeships. Over the last two years, 98% of the budget was spent helping thousands of businesses take on apprentices."

"We are also making it easier for employers and providers to offer high-quality apprenticeships by simplifying our systems and reducing bureaucracy. This includes cutting by a third the number of steps needed to register to take on an apprentice and supporting SMEs (small to medium-sized enterprises) by removing the limit on the number of apprentices they can recruit."

Shadow Education Secretary Bridget Phillipson remarked: "Labour will boost Britain's skills with our plan to transform the failed apprenticeships levy into a Growth and Skills Levy, giving businesses the flexibility they need to train and upskill their workforce to get our economy growing again.

"With their botched Apprenticeships levy, the Tories are snatching away thousands of opportunities from people wanting to train, upskill and progress in work. It will fall to the next Labour government to reverse this decade of decline, with the new wave of apprenticeships and training opportunities that our businesses and communities need."

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