With training budgets under constant pressure, many organisations are looking for ways to develop their workforce without significantly increasing costs. At the same time, skills gaps across procurement, leadership, project management and operations continue to grow.
For many UK employers, the solution already exists – and is often underused.
The Apprenticeship Levy provides a highly cost-effective way to invest in structured, long-term training using funds that are already set aside. Yet each year, millions of pounds of Levy funding expire without being used.
Understanding how the Levy works – and what it can be used for – can make a significant difference to both capability and cost.
How the Apprenticeship Levy Works
The Apprenticeship Levy applies to UK employers with an annual payroll of more than £3 million. These organisations contribute 0.5% of their wage bill into a dedicated digital account, which can then be used to pay for approved apprenticeship training.
There are two key cost considerations employers often miss:
- Levy funds expire after 24 months if unused
- Any unspent funds are lost and returned to the Treasury
This means the Levy is not an optional spend – it is money already paid, whether it is used or not.
For smaller organisations that do not pay the Levy, the cost benefit is still substantial. Through the government’s co-investment scheme, up to 95% of apprenticeship training costs are funded, with employers contributing just 5%.
Why Apprenticeships Are a Cost-Effective Training Solution
Apprenticeships are designed to develop skills over time, in the workplace, while individuals continue in their roles. This makes them fundamentally different from short courses or one-off training sessions.
From a cost perspective, apprenticeships offer several advantages:
Training Costs Are Largely Funded
Apprenticeship funding covers:
- Teaching and structured learning
- Assessments and end-point assessment
- Professional or vocational qualifications included within the programme
This removes the need for separate budgets for courses, exams or certifications.
No Extended Time Away From Work
Because apprentices remain in their roles:
- Learning is applied directly to live work
- Productivity is maintained
- The organisation benefits during the programme, not just at the end
This significantly improves return on investment compared to traditional training.
Reduced Recruitment and Turnover Costs
Developing existing employees is often far more affordable than recruiting externally. Apprenticeships support:
- Internal progression and succession planning
- Higher employee engagement and retention
- Reduced reliance on agency or replacement hiring
Over time, this can result in substantial cost savings.
Supporting a Wide Range of Roles and Teams
One of the most valuable aspects of the Apprenticeship Levy is its flexibility. It can be used to support development across multiple functions, not just one area of the business.
At Aspire, apprenticeships support roles including:
- Procurement and supply
- Leadership and management
- Project management
- Operations and commercial teams
This enables organisations to take a more joined-up approach to workforce development, aligning skills across departments while using a single funding route.
Professional Standards and Recognised Qualifications
Many apprenticeships include professional or vocational qualifications that are recognised across industries. For example, some programmes align with standards set by Chartered Institute of Procurement & Supply (CIPS) or Association for Project Management (APM).
For employers, this means:
- Training is benchmarked against recognised standards
- Skills gained are transferable and credible
- Employees gain qualifications without additional cost
This combination of funded training and professional recognition is difficult to match through other development routes.
Comparing the True Cost of Training Options
When viewed side by side, the cost advantage of apprenticeships becomes clear:
- Short courses and workshops often cost thousands per person, with limited long-term impact
- Standalone professional qualifications require exam fees and self-study time
- Apprenticeships deliver structured learning over 12–24 months, largely funded
For many organisations, apprenticeships offer the lowest cost per learner and the highest long-term return.
Making the Most of Levy Funding
Using the Apprenticeship Levy does not need to be complex. Employers typically:
- Access their Apprenticeship Service account
- Select an approved training provider
- Choose appropriate apprenticeship levels
- Agree start dates and learning plans
With the right support, Levy-funded training becomes a straightforward and effective way to build capability.
A Practical Investment for the Year Ahead
The Apprenticeship Levy is not an additional tax – it is a training budget already allocated. Using it strategically allows organisations to upskill teams, improve retention and strengthen performance at a fraction of the cost of traditional training.
As organisations plan for the year ahead, reviewing how Levy funding is being used is a practical, cost-conscious step towards building a more capable and confident workforce. With regular start dates throughout the year, Aspire offers apprenticeships that combine funded training, recognised standards and real workplace application. Find out more about our apprenticeships here.
