How the Apprenticeship Levy is set to change in 2025
This year the Apprenticeship Levy will be replaced by the Growth and Skills Levy, a new system with increased flexibility in how levy funds can be used and potential changes to expiry rules. The new levy aims to support various skills initiatives beyond apprenticeships, potentially including broader training programs and up-skilling initiatives. The government is also considering enhanced access to levy funding for non-levy-paying businesses, particularly SMEs.
Announced last year, we're still waiting for details to emerge on the exact shape of the new levy and a timeframe for its roll-out (although April 2025 has been mooted). What we understand so far is that employers will have greater control over their levy funds, potentially allowing them to allocate them more flexibly, including for training beyond apprenticeships. Indeed, Up to 50% of levy funds could be allocated to non-apprenticeship training.
The current 24-month expiry rule for unused levy funds may also be adjusted, potentially giving businesses more time to utilise their funds. And the inclusion of courses shorter than 12 months could also be a feature that better supports businesses' needs.
One of the main elements of the new system is the establishment of Skills England, a public organisation responsible for pinpointing the country's skill requirements and overseeing the efficient use of levy funds. It's intended to bring a more strategic direction to workforce planning. It will also have the authority to decide which non-apprenticeship training programs can receive funding, aiming to align education with the needs of industry. There's a good precis of the expected changes to apprenticeships in the Sage blog.