In October 2020, London Councils surveyed London's boroughs on apprenticeship pay and levy spend. We received a 100 percent response rate to both surveys.
Apprenticeship pay survey
This is the fifth year in a row that London Councils has surveyed boroughs on how much they pay their apprentices.
Apprenticeship pay varies considerably across London boroughs:
- Level 2 pay ranges from £4.30 to £12.29
- Level 3 pay ranges from £5.95 to £12.29
- For higher level apprenticeships, the hourly rate ranges from £8.72 to £15.24. However most boroughs have varying rates of pay for higher level apprenticeships.
The number of boroughs paying the London Living Wage or above to all apprentices has increased from 15 last year(45 percent) to 17 (52 percent). This has increased year-on-year; in 2016 just four boroughs (18 percent) paid the London Living Wage.
Apprenticeship levy survey
This is the second year we have asked boroughs about their apprenticeship levy and how much of this they have managed to spend.Boroughs were asked two questions about their use of the apprenticeship levy between April 2018 and March 2020: how much levy was available to them; and how much was spent during that time period.The period of two years was chosen as this is how long employers can use they levy funds before they expire and are returned to government.
Boroughs doubled their spending of apprenticeship levy funds from last year’s survey. However there is a significant underspend of the apprenticeship levy across all London boroughs. A total of £51,683,390 in levy funds was available to boroughs in between April 2018 and March 2020, of which £13,272,372 was spent. On average, London boroughs spent 26 percent of the total levy funds available to them between April 2018 and March 2020. The median figure was 24 percent. The borough that spent the highest percentage of levy funds available to them spent 61 percent, while the borough spending the lowest percentage spent 8 percent.
Challenges in spending the apprenticeship levy
In their responses, boroughs noted a number of barriers to making full use of the apprenticeship levy. These included:
- There are limited resources to fund salaries for new apprentices or release existing staff for 20% of worktime spent in training
- Recruitment, administration and management are resource-intensive
- Some young people aren’t ready for an apprenticeship and the levy can’t be used for pre-apprenticeship training
- There is a lack of engagement from schools and willingness to take on apprentices
- There is limited interest from local businesses in levy transfer given borough has majority SMEs that can attract full funding directly from government
- Covid-19 has presented a new set of challenges
For more information, please contact tim.gallagher@londoncouncils.gov.uk
