Apprenticeship funds totalling £1bn sitting idle

One billion pounds of funding meant to help provide apprenticeships and workplace training remains unspent by the Treasury – amid a critical skills shortage and youth unemployment crisis.

The money, from government levies on businesses, is stuck in the bank while the proportion of 16-24s not in education, employment or training has reached an 11-year high to 16 per cent in the last quarter of 2025, according to the ONS.

Meanwhile, 4:10 companies have warned the current education system cannot deliver essential skills industry needs.

Details of the unused money – from the Apprenticeship Levy and Immigration Skills Charge, a tax on overseas skilled workers – was revealed by trade organisation Make UK, which said it could be used to ‘create 235,000 new apprentice starts’.

According to a report by Make UK, access to skills is seen as ‘the biggest factor’ hampering the ability of small and medium businesses to scale up in to globally competitive firms, a longstanding Achilles heel of the UK economy compared to competitors.

It said: ‘To begin addressing this critical task, Make UK is calling on the Treasury to release the more than £1 billion of revenue raised from businesses for skills which is not being used to support employer investment in training’.

The trade body said ‘ringfencing the funding’ from the two charges ‘would help provide 235,000 new apprentice starts’.

Former Tory minister and executive director at Make UK, Robert Halfon, said: ‘Locking away £1 billion in unspent levy funds while businesses cry out for talent is a massive missed opportunity.

‘It’s time to unleash this funding, turbocharge apprenticeships, and give our manufacturers the skilled workforce to lead a skills transformation.’

Make’s report found 99 per cent of companies say access to skills will be key to future growth plans, with almost two thirds saying it will be critical. But almost four in ten (39 per cent) believe the education system isn’t capable of producing skilled young workers.