The Treasury has refused to confirm or deny whether it will pocket excess monies from the Apprenticeship Levy after the 24-month deadline to reclaim cash.
In April next year funds will start to be lost from employers' Apprenticeship Levy accounts if they have not been claimed back. Transport Network previously revealed that after a year, only around 5% of the total funds had been claimed.
Graph from Department for Education
Despite the scheme having been roundly criticised, leading to reductions in the amount of apprenticeship starts, and the Government instigating a second set of reforms this month, key issues still remain - namely the fact employers lose cash after 24 months even if they have not had approved schemes to claim against.
The Treasury announced this month an extra £90m to 'enable employers to invest a quarter of their apprenticeship funds on people working for businesses in their supply chain'.
However in response to questions from Transport Network, the Treasury revealed this money only becomes available once an employer is spending over the amount they pay into the levy.
As firms so far appear to be only claiming a fraction of the cash owed back to them, it is unlikely many will pay over and above what many already see as a tax in itself.
The Treasury admitted as much itself in a statement to Transport Network, which said: 'We do not anticipate that all employers who pay the levy will need or want to use all the funds in their accounts.'
The current rules mean that where the monthly cost of apprenticeship training cannot be fully met by funds from an employer’s apprenticeship service account because there are insufficient funds, an employer must co-invest 10% of the outstanding balance for that month, while the Government pays 90% of the cost of training.
This comes on top of earlier reforms that mean a levy-paying employer transferring their funds - up to 25% of the annual value of funds entering their apprenticeship service account - will have the freedom to transfer them across to any employer, including smaller employers inside their supply chain, or apprenticeship training agencie
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