Co-op Calls For Greater Industry Collaboration To Tap Into Millions Of Pounds Worth Of Unspent Apprenticeship Levy Funds

6th February 2024

Over £96m returned to HM Treasury in the last year from employers, which could have funded over 9,000 apprenticeships.

Co-op sources £23m funding for apprenticeships through its unique Co-op Levy Share service, matching over 2,000 apprenticeships across 140 different types of roles.

Three quarters (75%) of Co-op Levy Share funding utilised in disadvantaged areas as 56% of young people want to work or volunteer in something that makes a positive difference to society - a 4% rise from 2021.

Co-op is calling for private and public sector organisations to work together to ensure the Apprenticeship Levy is used more effectively to support young people, as it today reveals that millions of pounds of funds remain unspent and have been returned to central government, due to the current Levy rules set up by the Government and its inflexibility.

The challenge

This unspent amount totalled £96m[1] in 2022/23, which could have funded over 9,000[2] apprenticeships across the public and private sector. This figure marks a significant increase in underspent funds, with £11m being recorded in 2021/22. To date, £2,178m of funds have been returned to the Treasury since the Levy first came into place, with a peak recording of £604m unspent funds in 2020/21 during the pandemic. While recent figures are six times smaller than this peak, Co-op is urging businesses to come together to close the gap further and make better use of the funding.

Pressure on budgets across local government, charities and healthcare organisations have led to understandable capacity constraints, limiting the time and resource available to secure targeted, beneficial apprenticeship training.

Contributing unspent funds

The Office for Budget Responsibility (OBR) suggests £3.7bn will be raised in Apprenticeship Levy funding this financial year, providing opportunity for more funded training. To ensure this funding does not go to waste and jobs with social value to society are supported, the Co-op is calling on businesses of all sizes to consider contributing excess, unspent apprenticeship levy funds to levy share programmes. These programmes allow employers to share up to 25% of unspent levy funds, rather than return them to HM Treasury.

Through doing so, industry can help meet appetite demonstrated by Co-op research[3] that has shown young people are increasingly interested in applying to apprenticeships[4], while half (56%) of young people want to work or volunteer in something that makes a positive difference to society.

Co-op Levy Share

Over £23 million has been pledged by 80 organisations to the Co-op's own service, Co-op Levy Share, meeting an initial target set in 2021. Over 140 different types of apprenticeship job roles have been supported, including training for careers in environmental consultancy, engineering, healthcare, education, legal practice, HR, and the emergency services. With the support of 80 pledging businesses, the Co-op Levy Share has matched over 2,000 apprenticeships of which 1,400 have started their training.

Over a third (37%) of Co-op Levy Share funding has been used by publicly funded organisations since 2021, and with reported funding gaps of up to £4bn across the UK[5], this trend is expected to continue into 2024.

Supporting underrepresented groups

Co-op Levy Share has also reduced the ‘opportunity gap’ in apprenticeships for underrepresented areas and groups. Analysis of location data has shown that three quarters (75%) of Co-op Levy Share funding has been utilised in disadvantaged areas. Sharing levy funding has also enabled greater access to training for small and medium-sized enterprises (SMEs). At least 70% of Co-op Levy Share recipients in 2023 were employers with under 250 employees.

Claire Costello, Co-op’s Chief of People and Inclusion Officer, said: "We urge every organisation that finds itself with excess Apprenticeship Levy funds to consider supporting a Levy Share initiative. By doing so they can play a crucial role in supporting the creation of roles for people both starting out in their professional careers, and those with experience already under their belt, to get into purposeful careers at organisations that might otherwise be struggling with limited budgets in 2024.

"It’s fantastic to have reached our Co-op Levy Share target and to have improved access to training in areas of England that need it most. This success is a testament to our continued commitment to create more career opportunities for people from all backgrounds and age groups, and support the growth of a diverse, skilled economy.

“We are proud to have partnered with so many organisations that share our values and vision. We thank each of them for their support and want to do even more. Our member owners have made it clear to us that they want to create a fairer world for young people. Apprenticeships are a key driver of social mobility among this group and can play a major role in shaping future economic prosperity."

Sahar Makki is a Level 3 Adult Social Care apprentice at S4 Care in Stockport. Through the Co-op’s Levy Share, Levy from the Co-op, has funded Sahar’s assessment and training at a cost of £3,000. Without the Levy her apprenticeship wouldn’t have been possible. She said: “I always wanted to be a carer as I wanted to give something back. I love working with people and seeing the difference I can make in their lives. My clients smile when I arrive is enough for me” “After being a carer for a little while I wanted to improve my skills and the apprenticeship was the perfect way to do this. C4 Care has been fantastic supporting me every step of the way, and I now want to go on to more studies and become a Team Leader with C4.”

To learn more about apprenticeships at Co-op, please visit jobs.coop.co.uk/apprentice-hub