What started out as a ‘good idea’ has now become a tax on schools, and especially primary schools: at least in Oxfordshire. The apprenticeship Levy doesn’t seem to work as intended, as the following information provided by the Council to a Lib Dem question clearly shows.
The Apprenticeship Levy started in May 2017.
The levy is funded via a monthly charge against our payroll bill of 0.5%. This equates to approximately £100k a month. The money charged to our payroll is put into an OCC digital apprenticeship account and is drawn down by apprenticeship training providers on a monthly basis. For example, if 1 apprenticeship costs £4,800 and has a duration of 2 years, the provider will draw down £200 a month for 24 months.
Each month’s levy is treated as a separate pot of money with the oldest pot of funding being used first. The first allocation of £100k (May 2017) was used to pay providers until it was exhausted. For example, if our total training bill was £10k a month, it would take 10 months to use the first month’s levy. In the meantime, we would have accrued a further £900k over the following months which would not have been spent as there was sufficient in the first month’s pot to cover the costs. Once the first month’s levy was spent, future expenditure was taken from month 2 until this was exhausted and so on.
Since May 2017, Oxfordshire has accrued a total of £4,047,490 to spend on apprenticeships.
However, Oxfordshire can only keep the accrued levy for 24 months. So, we had until May 2019 to spend May 2017 allocation, June 2019 to spend June 2017 allocation etc.
Any money remaining in a pot that is more than 2 years’ old is returned to the treasury (i.e.The Government at Westminster – my addition). This means that any funding added to our levy pot before October 2018 and not spent was returned.
Our first repayment was September 2019. To date £611,788 has expired and has been repaid to The Treasury. This equates to approximately 37% of the levy we accrued between May 2017 and October 2018.
Levy accrued between November 2018 and October 2020 has not yet reached an expiry date so we have approx. £2,326,543 available to spend.
Spend on apprenticeships is increasing every year which indicates that the level of levy we will need to repay should reduce over the coming months and years.
Levy Spend per calendar year was:
| 2017 | £18,225.54 | ||
| 2018 | £144,403.85 | ||
| 2019 | £435,201.48 | ||
| Jan – Sept | 2020 | £511,227.38 |
It is anticipated that 2020 final spend will be approx. £700k as we have recently started a number of degree level apprenticeships that will draw down large monthly amounts.
For information, school contribution and spend for 2019 is:
- Contribution to the levy: £405,596
- Spend: £232,858
The county team continues to promote apprenticeships (both employed and CPD) where ever possible throughout the organisation whilst recognising further work needs to be done.
If this lack of spending the cash raised by the levy from schools, and MATs have the same problem, is common across the country then it is time to seek reform.
We need more apprenticeships, so making use of the cash to train teachers would be one possible change. Creating two non-teaching posts with substantial training elements might be another low cost approach that might also help reduce unemployment if linked to other programmes.
Whatever approach is taken, schools should not see any of their hard fought for cash being returned unspent to government. Just as they should not now be wasting cash on expensive recruitment advertising.
To ask for more funds must run alongside making the best use of the cash already in the system.
Action for local government: Apprenticeship funding needs radical change. If the Government increased Levy flexibilities, including allowing public pooling of funds, Treasury pausing its expiry policy, and devolving non-levy funding, local government could support local businesses in a much more targeted and coherent way, including by allowing them to target sectors, address local supply / demand side issues, widen participation to disadvantaged groups and specific cohorts. A proportion could be spent on pre-apprenticeship training / administration of programmes. This could support the development of the Opportunity Guarantee. Alongside these measures, we call for a levy payment holiday (up to 6 months) for businesses struggling with cashflow problems and allow employers to collaborate on transferring / pooling. DfE should also pause the switch-off of frameworks until March 2021.