Over £3 billion of unspent apprenticeship levy funds lost

Since 2017,  businesses in England with annual wage bills over £3 million have been required to pay a levy equal to 0.5% of payroll to finance workplace training. However,  a massive amount of the funds this levy generates are going unspent.

Employers who pay the levy can use the funds set aside for any approved apprenticeship programme or they have the option of transferring up to 25% of their levypot to smaller businesses that don’t pay the levy to assist them with their workplace training.

The Treasury takes possession of any funds left over after two years under the Government’s ‘use it-or-lose-it apprenticeship levy rules. Since 2019 to March 2022, employers have given the UK Treasury more than £3.3 billion in apprenticeship levy funds they were unable to use according to according to new data collected by apprenticeships experts the London Progression Collaboration (LPC). This means that businesses are losing out on the equivalent of £1.1 billion per year or £95 million per month.

The work we are doing to better utilise these unspent funds

Paragon Skill is working in partnership with Large Levy paying employers and levy transfer intermediaries such as London Progression Collaboration, Western Training provider network, and many of the combined authorities helping us to secure over £3 million in levy transfer fund pledges from businesses who are not able to spend their whole levy pot on their own internal training and who wish to support smaller businesses in their area. Working closely with these employers and Levy transfer partnerships for the last 18 months, we have worked to connect them with SME’s resulting in securing funds to support over 182 employers and over 600 learners who would not have had the opportunity for career development and training.

Take action and utilise your unspent levy funds today – Our Top Tips:

Putting internal personnel first

Ideally, look for chances to put programmes into place that benefit numerous employees rather than just one. Programmes for management development are a logical place to start, especially given that managers are essential to boosting performance and that many may not have received any formal training .

Change the narrative and gift it instead of losing it

If you find that after utilising your levy funds you still have a large amount that will be heading to the Treasury, then why not gift it? It’s fantastic that you are able to allocate funds in a way that positively influences  both society and the economy, not to mention the individual receiving the training and the business in which they are employed. By donating your otherwise unused levy to promote apprenticeships, you can do just that, assisting a business and sector in need and promote your business as doing something positive towards corporate social responsibility.

Sharing your levy funds  has a significant social impact because it not only addresses the need for recruitment in a way that is socially responsible, but also because by funding an apprenticeship within another organisation, you are investing in that industry to help it develop its own talent by cultivating young people’s technical and behavioural development to meet the needs of that business or sector.

Apprenticeships are vitally important for ensuring people can get on at work and businesses can fill skills gaps, but the Treasury aren’t being transparent about where billions of pounds of apprenticeship funding is being directed.


If you’d like to talk to us about how you can make the most of your levy funds then please get in touch today on 0800 783 2545

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