Many UK organisations are paying into the Apprenticeship Levy every month but not always making full use of the funding available to them. In fact, millions of pounds in levy funding expire each year simply because employers are unsure how to use it effectively.
If your organisation pays the levy, those funds are already allocated for skills development and training. The key is understanding how the system works and how you can use it to invest in your workforce before the funding expires.
In this guide, we explain what the Apprenticeship Levy is, how it works, and how your organisation can use it to develop skills through professional apprenticeships.
What Is the Apprenticeship Levy?
The Apprenticeship Levy is a UK government initiative introduced in 2017 to encourage employers to invest in workforce development through apprenticeships.
Employers with an annual pay bill over £3 million pay 0.5% of their payroll into the levy. These funds are placed into a Digital Apprenticeship Service account, where they can be used to pay for apprenticeship training and assessment.
To encourage employers to invest in training, the government also adds a 10% top-up to the funds in the account.
For example:
- If an employer pays £10,000 into the levy,
- The government adds £1,000,
- Giving the organisation £11,000 available for apprenticeship training.
However, the most important rule is that levy funds expire after 24 months if they are not used. When this happens, the funding returns to the wider apprenticeship system.
This is why it’s often referred to as a “use it or lose it” system.
How the Apprenticeship Levy Can Be Used
Levy funds can only be used to pay for approved apprenticeship training programmes and end-point assessments delivered by registered training providers.
The levy cannot be used for wages, recruitment costs, or general training courses outside of the apprenticeship framework.
Employers can use the levy to:
- Train new apprentices entering the organisation
- Upskill existing employees
- Develop future leaders and specialists
- Build internal capability in key business areas
Apprenticeships are designed to combine structured learning with practical workplace experience, allowing employees to apply their knowledge directly in their roles.
This approach ensures that training delivers real business value, not just theoretical knowledge.
Levy Transfers: Supporting Other Organisations
If your organisation is not able to use all of its levy funds, there is another option available.
Employers can transfer up to 50% of their unused levy funds to another organisation, such as a partner, supplier, or smaller business.
This allows organisations to support skills development across their supply chain or industry while ensuring levy funding is used effectively rather than expiring.
Many large organisations now use levy transfers to support SMEs and partner organisations in developing their workforce.
Why Many Employers Lose Their Levy Funding
Despite the opportunities available, many organisations still fail to use their levy funding.
Some common reasons include:
- Lack of awareness about how the levy works
- Uncertainty about which apprenticeships are available
- Limited internal time to manage apprenticeship programmes
- Not knowing which teams or roles would benefit most from training
Without a clear strategy for using levy funding, organisations can quickly find that their funds begin to expire.
Working with an experienced apprenticeship training provider can help employers identify suitable programmes and maximise the value of their levy investment.
Apprenticeships Available at Aspire Procurement Training
At Aspire Procurement Training, we specialise in apprenticeships designed for professionals working in procurement, supply chain, leadership and project management.
Our programmes combine professional qualifications with real-world application, ensuring learners develop practical skills that benefit both their careers and their organisations.
Click here to view our apprenticeships.
Upcoming Changes: The Growth and Skills Levy
The UK government has announced plans to introduce the Growth and Skills Levy, which will gradually expand how levy funding can be used.
The new approach aims to introduce more flexible training options alongside traditional apprenticeships, helping employers address a wider range of skills needs.
While apprenticeships will remain a central part of the system, the reforms are intended to make skills funding more adaptable for employers.
For organisations already paying into the levy, this makes it even more important to plan how funding will be used effectively.
Why Apprenticeships Deliver Real Business Value
Apprenticeships differ from traditional training programmes because they focus on practical workplace application.
Employees develop knowledge through structured learning while applying those skills directly in their roles.
For employers, this means apprenticeships can lead to:
- Improved project outcomes
- Stronger procurement and supply chain capability
- Better stakeholder management
- Increased productivity and efficiency
Apprenticeships also help organisations build a pipeline of skilled professionals, reducing reliance on external recruitment.
How Aspire Procurement Training Can Help
At Aspire Procurement Training, we support organisations at every stage of the apprenticeship process.
Our approach ensures that apprenticeship programmes deliver real value for both employers and learners.
We support organisations by:
- Helping you understand how to use your apprenticeship levy funding
- Identifying the most suitable programmes for your workforce
- Supporting enrolment and compliance requirements
- Delivering training through experienced tutors and mentors
Our goal is to ensure your apprenticeship investment delivers measurable outcomes for your organisation.
Don’t Let Your Levy Funding Expire
If your organisation pays into the Apprenticeship Levy, those funds are already allocated for workforce development.
By using apprenticeships strategically, you can invest in your people, strengthen your organisation’s capabilities, and ensure your levy funding is put to good use rather than expiring unused.
If you would like to learn more about how to use your levy funding effectively, Aspire Procurement Training can help you explore the options available and identify the best programmes for your organisation.
