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Levy reallocation limit to rise to 25%

Starts in September 2018 were down 40% on the same month in 2016…

Levy reallocation limit to rise to 25%


It’s not exactly news that the apprenticeship reforms have taken their toll on the number of apprenticeship starts.  

Starts in September 2018 were down 40% on the same month in 2016 – but up 57% on September starts last year. 

And it looks like things might still be looking up. At the 2018 Conservative Party Conference in Birmingham, the Chancellor announced that the apprenticeship levy is going to become more flexible. FE sources have suggested this means levy payers will be able to reallocate up to 25% of their levy funds to other companies. 

This is a pretty big deal.

When the levy was first introduced, levy funds couldn’t be transferred between employers. Then levy payers could transfer up to 10% of their levy to one other company, before the Government relaxed the rules even more so it could be transferred to unlimited employers. The increase from 10% to 25% marks a massive increase in flexibility around apprenticeships and the levy – flexibility which employers have been lobbying for. 

According to FE Week, take-up of the 10% levy reallocation hasn’t been great – but while the increase to 25% isn’t exactly a switch to the unrestricted skills levy they’ve been hoping for, it’s possible that employers will respond more to this increased flexibility. 

Levy reallocation

At the FE-Q great apprenticeship debate earlier this year, the levy reallocation was a point of great interest. Gordon Marsden MP, the shadow education minister and FE-Q panellist, welcomed the relaxation of the levy reallocation rules, and encouraged employers to reallocate funds in their local regions. 

In fact, levy reallocation brings loads of benefits: smaller companies can offer more apprenticeships, allowing business to boom and the employment rate to soar. It allows organisations to forge partnerships: growing communities and helping local economies. Most importantly, people across the UK can gain skills and opportunities – and it won’t cost employers an extra penny. 

Whether you're an employer who pays the levy or not, there’s a lot to learn about funding apprenticeships – find out more about sharing your levy funds here. If you’re already delivering apprenticeships, take a look at our top tips for employer-providers. 

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