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Billions in unused apprenticeship levy funds returned to the Treasury

New research has uncovered that £3.3 billion pounds of apprenticeship levy funding has been returned to the Treasury since 2019.

The London Progression Collaboration (LPC), created by think tank IPPR, found employers in England have been returning unspent levy funds put aside for apprenticeships, leading businesses to lose out on the equivalent of £1.1 billion per year or £95 million per month, since 2019.

More on the apprenticeship levy:

Small businesses miss out on millions in apprenticeship levy funding

Entry-level apprenticeships plunge

The ‘failed’ apprenticeship levy needs reform, says CIPD

Anna Ambrose, director of the LPC, has urged government to be more transparent regarding the returned levy funds.

Speaking to HR magazine, she said: "We’ve seen a stark decline in apprenticeships, particularly in entry-level roles best suited to young people, at the same time as a cost of living crisis which underlines the need to for good-quality, well paid employment.

"It’s time for the government to be far more transparent. This could go some way to giving businesses certainty and ensuring that levy funds are spent on the places and people that need it most."

Ambrose suggested money could be used to support small and medium-sized businesses (SMEs).

Part of the levy scheme includes co-investment, whereby the government subsidises part of the cost of training and assessing apprentices.

She said: "In theory, once returned to the Treasury, these funds pay for apprenticeships for small and medium-sized businesses via the government’s ‘co-investment’ system, but the system is too opaque and that means we can’t say with any certainty how the funds are being used."

"With the staggering value of expired apprenticeship funds revealed today, an average of £95 million per month, the lack of transparency over how that is spent has become hard to ignore."