The amount of money expected to be generated by the apprenticeship levy has dropped by around £200 million, according to new official documents.

The report published alongside the chancellor’s autumn statement revealed that the expected levy yield in 2019-20 now stands at £2.8 billion - down from £2.97 billion estimated by the Office for Budget Responsibility in its policy costs for the 2015 autumn statement.

A spokesman for the Association of Employment and Learning Providers said: “This gives us cause for concern about how much funding will be allocated overall.   It is also the second downgrade that we have seen in the OBR’s forecast figures since the levy was announced in July 2015.”

The AELP also expressed disappointment at the lack of government assurances that a “minimum fixed budget will be allocated to non-levy payers for the next five years” for apprenticeships.

The spokesman added:  “We need to ensure that much needed apprenticeship places will be available to young people in towns and rural areas where large levy paying employers aren’t operating.”

Once the levy comes into effect in April 2017, employers with an annual pay bill of more than £3 million will be required to pay a levy amounting to 0.5 per cent of the total.

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