Workwhile, a not-for-profit organisation dedicated to promoting quality employment, has revealed that over £1.2 billion has been raised through the apprenticeship levy by the public sector since 2018.
However, a staggering quarter of this amount, totalling over £300 million, remains unspent. The analysis is based on Freedom of Information data, highlighting a significant missed opportunity in utilising funds to create apprenticeships.
Workwhile’s findings suggest that numerous local authorities, NHS Trusts, and police forces across England are not maximizing the potential of their apprenticeship levy.
The public sector is losing £1 in every £4 raised, a situation that could have facilitated the creation of nearly 30,000 additional apprenticeships.
Despite facing unique challenges such as a recruitment and retention crisis and acute financial distress, the public sector has returned substantial amounts to the government. While a portion has supported smaller private sector employers in creating apprenticeships, millions have returned to the Treasury, diverting funds from addressing crucial sector-specific issues.
The apprenticeship levy, funded by organisations with over 250 employees contributing 0.5 percent of their annual pay bill, is ring-fenced exclusively for new apprenticeships. This restriction prevents the funds from being allocated to day-to-day services to support public services.
If organisations fail to spend their apprenticeship levy within 24 months, the funds are forfeited. Workwhile argues that granting the public sector more flexibility in retaining the levy could boost apprenticeship starts by up to 20 percent annually. In the context of a recruitment crisis, especially in adult social care with 10 percent of roles vacant in the previous year, and a decreasing local government workforce, flexibility in levy spending becomes imperative.
Workwhile is urging the government to review the apprenticeship levy as part of its Public Sector Productivity Programme, aimed at increasing public sector productivity by 0.5 percent per year. The organisation believes that reforming the apprenticeship levy will play a vital role in supporting public sector productivity and addressing workforce challenges.
While the government has previously recognised the importance of creating apprenticeships in the public sector, the Apprenticeship Levy Public Sector Target, established for public sector bodies in England, was scrapped in 2022. Workwhile’s co-Founder and director, Anna Ambrose, emphasised the need for greater control in the public sector, stating that empowering organisations to create apprenticeships is crucial for addressing the current crises and ensuring resilient services for communities.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
