Apprenticeships and skills minister Gillian Keegan has said there are currently “no plans” to extend the expiry period for employers’ levy funds beyond two years in response to the coronavirus pandemic.

Responding to written questions by Karin Smyth, Labour’s shadow minister for Northern Ireland, and Labour MP Dan Jarvis, asking the government what assessment had been made of the potential merits of extending the deadline for employers to claim apprenticeship levy funds beyond two years, Ms Keegan said:

“From the point at which funds enter an employer’s account, they already have 24 months in which to spend the funds, and these funds only begin to expire on a rolling, month-by-month basis 24 months after they enter an employer’s account.

“Levy-paying employers can transfer up to 25 per cent of their annual funds to help support apprenticeship starts in their supply chain or to meet local skills needs. We remain committed to improving the operation of the apprenticeship levy, and while we recognise the current challenges facing employers, we currently consider that this period is sufficient to give employers time to develop their apprenticeship programmes and encourage them to create new apprenticeship opportunities.”

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Losing unused funds

Ms Smith raised her concerns specifically around ensuring that NHS trusts would not lose unused funds as a result of the Covid-19 outbreak - but Ms Keegan said to help employers (including NHS trusts) offer new apprenticeships, the government was offering £1,500 for every apprentice they hire as a new employee from 1 August 2020 until 31 January 2021 - rising to £2,000 if they hire a new apprentice under the age of 25.

The number of reservations that small- and medium-sized enterprises (SMEs) can now make through the apprenticeship service had also been increased from three to 10, enabling them to recruit more apprentices, she added. 

Association of Employment and Learning Providers managing director Jane Hickie said: “For as long as the levy is funding the entire apprenticeship programme, we don’t agree that the two-year deadline should be extended because unused funds desperately need to be released  to pay for the apprenticeships of the non-levy paying SMEs.”