The spending review announced that the expected amount of money the apprenticeship levy is expected to raise each year by 2019/20 has dropped by £200m since it was first announced.
The Treasury predicted in last year’s autumn statement that the levy would raise £3bn in the financial year 2019/20, but forecasts released by the government now give a projected figure of £2.8bn in 2019/20.
The levy is now not expected to raise £3bn a year until 2021/22 – a full two years later than originally predicted.
Additionally, as we have previously reported, the apprenticeship funds that non-levy paying employers will receive is to be paid from the ‘levy pot’ and it was anticipated that levy underspend would easily fund SME apprenticeships. With the news that the amount of money that the levy is expected to raise has dropped, there were no assurances that a minimum fixed budget would be allocated to non-levy payers irrespective of the amount of money left in the ‘levy pot’.
It is vital that SMEs have sustained access to sufficient apprenticeship funding to ensure economic growth and productivity in towns and rural areas where large, levy paying employers do not operate. It is also vital that the migration of young people to large cities away from towns and rural areas is discouraged through increasing the access these young people have to opportunities particularly through apprenticeships.