Apprenticeship levy transfer

Find out what the apprenticeship levy is and the options for transferring your apprenticeship levy funds to another employer.

14 November 2023

Key points

  • Working across systems, employers can transfer apprenticeship levy funds that support communities and staff.

  • A standard placement agreement will ensure compliance with NHS recruitment standards and simplify apprentices' experience in different workplaces.

  • The levy can be used creatively to support the wellbeing of staff or provide apprenticeships to others in the workforce. 

What is the apprenticeship levy?

The apprenticeship levy is paid by employers with a pay bill of more than £3 million per year and the funds are placed in a service account to spend on apprenticeship training. The apprenticeship levy is paid at a rate of 0.5 per cent of an employer’s annual pay bill with an additional ten per cent added by the government.

If funds are not spent, they expire 24 months after they appear in the account and will return to the government.

Up to 50 per cent of the annual value of the funds entering an employer’s apprenticeship service account can be transferred to another employer to support the delivery of apprenticeships.

The government fully funds apprenticeships in small businesses (SME's) that do not pay the levy by paying the full cost of training for anyone up to the age of 21. This reduces costs and burdens for smaller businesses and delivers more opportunities for young people to kick start their careers.

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Using the levy transfer

As well as within the organisation, the levy can fund apprenticeships in outsourced organisations, or across an integrated care system (ICS). This supports skills development across the health and care system and positively impacts service delivery. By forecasting, organisations can anticipate their levy spending and allocate transfer funds to minimise the risk of unused funds.

The NHS Long Term Workforce Plan commits NHS England to work across government to ensure any changes to the NHS’s apprenticeship funding approach are supported by and align with wider government policy. As part of this commitment, NHS England and the Department for Health and Social Care will work with the Department for Education to:

  • Enable apprenticeship levy funds to be more easily transferred between employers in an ICS.
  • Ensure that data on the use of apprenticeships in the NHS is more visible at national and local level.

Working collaboratively will help deliver a joined-up approach to apprenticeship funding that more effectively supports employers and systems to plan and deliver apprenticeships strategically.

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Transfer options

Support the viability of apprenticeship programmes

Organisations may find themselves in a situation where they only want or need a limited number of apprentices, but their training provider requires a larger number to run the programme. Therefore, they may transfer a percentage of their levy to another trust or health provider to fund apprentices on the same programme to achieve the required numbers. This can also give negotiating power around the cost with the training provider.

Work in partnership in systems

Organisations are encouraged to collaborate with partners in their ICS to identify future health skills gaps across the area. As a system, organisations can transfer levy funds to smaller health organisations to pay for apprenticeships that provide the skills needed across the region.

Integrated care system priorities

The levy cannot be used to joint-fund apprenticeship training but, one trust in your ICS can be nominated as the lead organisation to employ apprentices who deliver work benefiting the entire region.

Examples have included a business administrator or project manager apprenticeship. These roles could be used to support and lead the delivery of ICS-wide projects or workstreams. This approach would also strengthen relationships and encourage collaborative working.

Further costs will be associated even with levy support and should be considered early.

Build capacity in voluntary, community and social enterprise sector

Organisations could work in partnership with voluntary, community and social enterprise care delivery partners, such as local health charities, to identify roles that could be trained through an apprenticeship. These collaborations may help support the care delivery of the funding organisation.

Outsourced services and the supply chain

Set up an agreement with an outsourced service, or an organisation in your supply chain, to fund an apprentice who will indirectly support service delivery and patient experience. Examples include:

  • Gardeners (horticulture and landscape operative apprenticeship) – an employer could negotiate that the receiving organisation provides a set number of hours per month, spent onsite maintaining green spaces.
  • On-site retailers – offer to fund a retail leader or manager apprenticeship.
  • Catering (hospitality manager/supervisor or team member apprenticeship) – they would then be deployed in the NHS organisation.
  • Payroll (accounting apprenticeship) – where the apprentice works for the outsourced organisation who processes your payroll.
  • Pensions (workplace pensions administrator or consultant) – where the apprentice works for the outsourced organisation that processes staff pensions.

Support health and wellbeing of staff

Organisations could fund an exercise and fitness personal training apprentice in a local sports facility who could offer staff exercise classes, for a set number of hours per month to support the health and wellbeing of staff.

Support community wellbeing

Transfer levy monies to organisations such as local councils, Sports England, or the British Heart Foundation to provide a community activator coach or community sport and health officer apprenticeship. These apprenticeships could support the engagement of the local community with sports initiatives that help change people’s attitudes about health.

School engagement

Fund a local school or college to provide an employment related services apprenticeship. This apprentice role could support with career coaching and guidance. Strengthening the link between the trust and the school or college.

The apprentice could become an ambassador for the NHS by presenting information about the roles and careers available in healthcare, our Inspire, Attract and Recruit toolkit offers more advice on how best to raise awareness of apprenticeships.

Widening participation agenda

Trusts could work with local voluntary, community or social enterprise organisations to fund a youth support worker, and support worker apprenticeships. The apprentices could support and mentor those on work placements as part of a pre-employment programme in the trust. This support could help make the programmes more inclusive and attractive and improve the numbers of those moving into an apprenticeship or a paid role in the trust.

Other care providers

Organisations could transfer money to charitable organisations or to hospices, care homes and nursing homes. This could fund apprenticeships in clinical roles such as health care assistants, who then support capacity and relationships between care providers.

Receiving transfers

When receiving a transfer from another organisation, training and assessment costs for the apprenticeship standard will be paid for in full by the transfer.

To receive the transfer, an account on the apprenticeship service must be set up.

The organisation sending the transfer should be encouraged to fund the whole duration of the apprenticeship up to the maximum allowed. If the funds run out you will pay five per cent of the training costs for the remainder of the apprenticeship, the government will pay the rest.

Any organisation can receive apprenticeship transfer regardless of whether they pay the levy or not.

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Using an apprenticeship levy pot to support organisations of all sizes

Health Education England (now NHS England) started a levy transfer service for the North East and Yorkshire in September 2019. They worked with NHS levy-paying organisations to maximise levy use by transferring excess levy into the system. These partners are from across health and care, including GP practices, dental practices, independent care homes, local authorities, care wards and hospices.

The team advertised directly to smaller organisations making them aware they could be levy recipients and working with those who contacted the team directly. By building relationships with NHS trusts they gained a better understanding of the levy funding available in the region.

Levy transfer supports both smaller and larger organisations, enabling them to develop comprehensive apprenticeship schemes as an integral part of their workforce plan.

By emphasising to private sector companies that it is in everyone’s interest to support the health and social sector, levy transfer was agreed in support of their corporate social responsibility mandate. There are also ongoing conversations with universities in the region who may wish to provide levy funds to the sector.

The work put into making this an effective service is reflected in the size of the levy pot, increasing from £884,000 in 2019 to approximately £15 million today enabling around a thousand apprenticeships in the region. Therefore, there has been no recent situation where the team has been unable to support with funding. A fantastic achievement that shows the strength of creating system-wide collaboration.

The team spoke to trusts, supporting them to forecast their finances and recruitment plans to understand the pledges they can make. Organisations are increasingly embracing strategic forecasting which provides clarity to interested smaller organisations. The service has supported small and medium organisations that wouldn’t otherwise have had enough budget to embed apprenticeships into their workforce development plans.

"We have seen many benefits from implementing this service; greater utilisation of regional levy is one but ultimately it has led to the further strengthening and development of the workforce within small and medium employer organisations, demonstrating huge investment in our regional health and care workforce."

Rachel Chalk, Apprenticeship Development Manager, NHS England, North East and Yorkshire Region.

    1. Strategically forecast apprenticeship numbers to calculate levy underspend or transfer needs.
    2. Engage with localised levy transfer services to support all organisations in the system.
    3. Levy transfer is not just for smaller organisations, your apprenticeship plan may require further investment.
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Building a system to transfer apprenticeship levy

For over a decade, a network of colleagues across NHS and health and social care organisations in Nottinghamshire, meet to discuss apprenticeships and pre-employment. The network is a space to share documents, lean on member expertise and work together on projects including a mutually agreed minimum apprenticeship wage.

Since the introduction of the apprenticeship levy, this network has been instrumental in reviewing levy transfer requests from other organisations in the health and care sector. The network created an application form to facilitate levy transfer across the sector in the Nottinghamshire region. The Nottinghamshire Alliance Training Hub, a local GP collaboration, currently holds the form and manages the process with support from other members.

The network received numerous applications for levy transfer. Through the support and vetting of contributing levy payers, the network has not yet had to reject any applicants who wish to promote apprenticeships within their organisations. These organisations, both public and private, span GP surgeries, community care, hospices, and third-sector organisations, with many applicants using the levy transfer process multiple times to facilitate apprenticeship recruitment.

The network intentionally ensured the levy transfer form they created was like the national transfer form. This enabled the organisations to easily transfer information across should transfer limits be reached, or to smooth the process for applicants who apply from outside the region and need redirecting to the national form.

Initially, significant support was given by the network to support organisations in creating an apprenticeship service account, with guidance provided on how to create the account and what is needed for the transfer of funds. 

Given the success of the programme, many applicants have previously created accounts and requested levy transfers or are able to be guided by the helpful support of the Education and Skills Funding Agency reducing the amount of support the network needed to provide directly.

This process has supported local organisations to increase their apprenticeship offering and implement a local-first philosophy within the region. The sector is working collaboratively to support and enable other organisations to provide apprenticeship opportunities to their local communities.

"I am very supportive of our efforts to increase the number of apprentices trained by the NHS, not only will this encourage a supply of trained and skilled recruits to meet the increasing needs of our population but supporting smaller organisations like GP practices will extend opportunities, particularly for younger people in some of the most deprived areas of our region."

Richard Barker, Regional Director, NHS England, North East, Yorkshire and North West regions.

    1. Be conscious of the amount of administration required to successfully implement a levy transfer process, by establishing a network of colleagues in similar roles the burden can be shared.
    2. Ensure local initiatives are closely aligned to national initiatives to prevent rework and support colleagues on a wider scale.
    3. Ask colleagues to be mindful of the full cost of apprenticeship recruitment prior to placing a levy transfer application, apprenticeship wages and administrative costs will need to be considered.
    4. Working at a network level ensures consistency and supports local communities.
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Standard placement agreement to support apprentice experience

In the South Yorkshire region, a long-standing support network exists offering apprenticeship leads in the system the opportunity to collaborate and share best practice. This network was instrumental in creating a pilot programme for trainee nursing associates, it has grown to be pivotal in facilitating a wide range of apprenticeship placements.

In 2018, the network collaborated on the creation of a memorandum of understanding (MOU) allowing movement of apprentices to alternative employers for placement experience.

In 2021 the MOU was entirely reworked to implement new apprenticeship programmes that require placement experience to fulfil curriculum requirements. This change aimed to address ongoing concerns, such as out of area placement requests. To ensure its success, the partnership formed a small task and finish group managed by the integrated care system apprenticeship project manager. the group also consulted a senior employment lawyer working within the system to make sure everything complied with regulations.

By signing the new apprenticeship placement agreement employers, which superseded the previous MOU, employers confirm they have complied with the NHS recruitment standards. This means their apprentices have a new DBS check for adults and children, and they have appropriate indemnity cover in place. Each organisation is required to have its human resources director sign the agreement.

This agreement is being successfully used with a wide range of clinical and non-clinical apprenticeships. It supports small employers who can request placements in secondary care without the use of honorary contracts for the most part. By ensuring a unified approach across the ICS, apprentices can more easily gain placement experience with alternative employers and employers understand the technicalities of hosting apprentices.

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Further information

    • Full guidance about transferring levy funds is available on the website.
    • Access further information about receiving a levy transfer from another business to fund an apprenticeship on the website.
    • Healthcare Apprenticeships Standards Online created a levy transfer FAQ for further information.
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