How to Spend Your Apprenticeship Levy Funds in 2020

Make 2020 the year you get the most out of your Apprenticeship Levy funds and start developing next year’s apprenticeship strategy now.

 According to the CBI’s 2018 Education and Skills Survey, more than a quarter (26%) of employers don’t intend to use their Apprenticeship Levy funds and have instead absorbed it as ‘as an added cost of doing business’.

Multiple figures have been flying around as to what this could amount to, including there being £3 billion worth of unspent funds and £37 million of expired funds being returned to the Treasury. 

Avoid being part of the 26% and begin developing a levy strategy now. 

Turn graduate programmes into apprenticeships

Setting up and maintaining your own graduate scheme can be costly. To do a grad scheme right requires commitment and investment. And with a graduate costing approximately £3,383 to hire, businesses have begun to look at alternative options for bringing in entry-level talent. 

61% of graduates view companies that have graduate schemes as outdated, with 39% believing they limit accessibility for ethnic minorities, people with disabilities and those with varied educational qualifications. And they’re not wrong. 

Despite the majority of the UK population attending state education, they only make up for 57% of graduates hired by companies. While work is being done with universities to improve their diversity, there’s still a lot more to do. 

Many companies are widening their early careers initiatives to encompass apprentices; some are even converting their graduate schemes into apprenticeship programmes. In fact, the study found that just over a third of employers stated they’ve reconfigured training into apprenticeships. 

When the Apprenticeship Levy was introduced, it widened the net on who could be an apprentice. Now, anybody (including graduates) can up-skill themselves in a new industry through an apprenticeship. 

The benefit of making apprenticeships the core training element of an entry-level programme is that you can have a variety of people all at the same level, with the same level of opportunity available. A school-leaver, a graduate and someone that’s returned to work all have an equal chance of success. 

Keep hold of your best talent and unlock their potential

Just a quick survey of your own working environment will tell you there are very few people whose current jobs are the ones they pursued when leaving university. Many fall into roles and work their way up, perhaps moving sideways to try something new, or even going into a completely different industry.

The result of this is that many people have jobs they were never formally trained for. But the levy provides a solution to this. The majority of apprenticeships include at least one industry-recognised professional qualification, so you can use your funds to up-skill your existing employees at no extra cost. Here we hero the path which our apprentice Chetna took to remedy this particular challenge. 

Meet Chetna

Chetna works at NatCen, a registered charity and Britain’s leading independent social research institute. As a not-for-profit organisation, she found there was little budget for training. However, by utilising NatCen’s Apprenticeship Levy funds she was able to gain her CIPD qualification through an HR apprenticeship. She comments:

“I never thought in a million years (at the age that I am now) that I’d be doing an apprenticeship, whilst working full-time with two young children. If your organisation is an apprenticeship levy payer then definitely enquire.

It’s not just for entry-level roles but helps you gain the theory behind what you are already doing, giving you that foundation on best practice. I have learnt so much in just a short space of time.”

– Chetna Kerai, Assistant HR Business Partner

However, apprenticeships aren’t just for up-skilling. In the age of automation, re-skilling is the new trend in recruiting and in a McKinsey study it was revealed executives view retraining as an ‘urgent business priority’. 

Apprenticeships are designed to train people into precise job roles. Employees wanting to re-skill into a new career can complete a single apprenticeship and have an almost guaranteed job in that industry.

So what are you waiting for?

It’s understandable that some employers are hesitant about the levy, it’s been deemed inflexible and funding rules can be difficult to understand. However, training providers like Arch, part of AVADO, are here to help. Make the investment in apprenticeships and your employees will feel the investment in them. Start developing a 2020 plan on how to make the most out of your Apprenticeship Levy funds and make the process as stress-free as possible. 


AVADO are a leading distance learning provider with over 20 years of experience in the education sector. In 2018, we joined forces with Ofsted ‘Outstanding’ provider Arch Apprentices to become one of the most exciting providers in the UK. 

Since the Apprenticeship Levy was announced in 2015, Arch Apprentices have provided levy consultation services with businesses across the country on how to utilise their levy effectively. Whether you’re a levy payer or not, we can work with you to discover how apprenticeships could support your 2020 talent strategies. 

Stephanie Khan

Posted October 28, 2019