ADD2802 - LAIN Apprenticeship Levy Transfer Project

1.1.    Formed in 2021 and backed by the Mayor of London, the London Anchor Institutions’ Network (LAIN) brings together major organisations from across London who are committed to using their procurement, workforce and estate-management capacity to help create a fairer, greener and more prosperous city. 
1.2.    LAIN is the biggest cross-sector network of its kind. Through the network, LAIN members are working together on shared goals – from tackling workplace inequalities, getting more Londoners into ‘good work’ and supporting inclusive economic growth, to taking action on climate change.
1.3.    LAIN forms part of the Mayor’s Reducing Inequalities programme. It is supported by a core programme team at the GLA. 
1.4.    As part of its mission to address structural inequalities and drive inclusive economic growth, LAIN has been exploring what more London’s major employers can do to address barriers to the employment, progression and retention of parents – primarily women – in the workforce. These barriers include significant staff shortages in the early years (EY) sector, impacting on the availability of accessible, affordable and quality EY provision in London.
1.5.    LAIN has identified a key intervention: the transfer of unspent Apprenticeship Levy to EY providers to fund apprenticeship training. Organisations within the network – such as Transport for London, the University of London and several NHS trusts in London – have previously done this. 
1.6.    Apprenticeships offer a vital route to building capacity in the EY sector, while also creating meaningful employment opportunities for Londoners who are underrepresented in the labour market. 
1.7.    The Apprenticeship Levy is a monthly 0.5 per cent tax that employers must pay if they have an annual wages bill of more than £3m. Employers can draw down their levy funds to fund apprenticeship training for new and existing employees. They can also transfer up to 50 per cent of their levy to small and medium-sized enterprises (SMEs), or businesses in their supply chain, to fund apprentices of their own. This is done via the government’s online portal, the Digital Apprenticeship Service. 
1.8.    Any unspent levy funds are returned to HM Treasury when they expire. This is currently after 24 months. However, this is due to change to 12 months under central government’s reforms to the levy (which is being renamed the Growth and Skills Levy). The change to the levy expiry period is due to come into effect from September 2026. Significant sums of Apprenticeship Levy currently expire every month; this is likely to continue when the reforms come into effect. In 2023-24, £60m of apprenticeship funding was returned to HM Treasury due to underspend.
1.9.    Transferring unspent levy to EY providers will ensure levy money is kept in London’s economy. It will fuel the city’s growth; upskill Londoners; and enable more women to remain in work, rather than dropping out of the labour force due to caring responsibilities.
 

2.1.    This initiative will support: 
•    the EY sector in London to recruit and upskill their workforce, to better meet the demand for accessible, affordable and quality EY provision; this will enable more parents – primarily women – to enter and remain in the workforce
•    the creation of more apprenticeships, enabling more Londoners to upskill and progress in employment.
2.2.    It involves procuring a service from a specialist provider to: 
•    work with local authorities, training providers and EY-sector stakeholders to promote the levy-transfer opportunity and the value of apprenticeships; and generate levy transfer requests 
•    match levy donors (LAIN members and affiliated organisations) and recipients (EY providers), to ensure levy funds are used effectively and equitably across the sector
•    provide practical support to: 
o    EY providers to ‘request’ levy from LAIN members and affiliated organisations via the Digital Apprenticeship Service portal
o    LAIN members and affiliated organisations to transfer their levy via the same portal
•    support EY providers receiving levy transfer to become ‘good employers’, by promoting the Mayor’s Good Work Standard; and providing advice and guidance on effective line management support for apprentices
•    report back to LAIN on the number of apprenticeships created and the value of levy funds transferred, plus additional metrics that demonstrate how the initiative has helped to tackle structural inequalities. 
2.3.    The initiative will have a target output by October 2026 (project closure) of:
•    £350,000 levy funds transferred to EY providers via the Digital Apprenticeship Service portal
•    around 50 apprenticeships created within the EY sector (across entry-level and progression pathways). 
 

3.1.    Section 149(1) of the Equality Act 2010 requires public authorities, of which the GLA is one, to have due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by under the Equality Act 2010; to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not; and to foster good relations between persons who share a relevant protected characteristic and persons who do not. Relevant protected characteristics are age, disability, gender reassignment, pregnancy and maternity, race, sex, religion or belief, and sexual orientation. 
3.2.    The GLA has convened LAIN and coordinates the network on an ongoing basis, which is focused on addressing structural inequalities. 
3.3.    Supporting apprenticeship creation in the early years sector would have positive implications for equalities: 
•    The EY sector is critical to allowing parents – primarily women – to remain in work, rather than dropping out of the labour force due to caring responsibilities. 
•    EY providers traditionally employ young people – often school leavers with limited qualifications (within which group, economically disadvantaged and marginalised young people are overrepresented), as well as those returning to work. Enabling more apprenticeships is key to strengthening the skills and progression prospects for these groups. 
•    High-quality EY provision makes the most significant impact on the life chances of the most disadvantaged babies, toddlers and young children. Building the skills of the sector’s workforce, can therefore also help to improve prospects for the youngest, most disadvantaged in society.
3.4.    In line with the Mayor’s commitment to good work, the project will stipulate that EY settings that benefit from the initiative must commit to: 
•    paying at or above the national minimum wage (with encouragement to meet the London Living Wage)
•    the apprentice working at least 16 hours per week (the minimum for a part-time position)
•    the apprentice having a contract of employment (not a zero-hours contract) to work for the employer throughout the apprenticeship and the end-point assessment.
These standards will help to ensure that apprenticeships are not only accessible but also meaningful and sustainable, contributing to long-term economic inclusion.
 

Key risks and issues
4.1.    The key risks and issues are outlined in the table below:

Links to Mayoral strategies and priorities
4.2.    LAIN forms part of the Mayor’s Reducing Inequalities programme, for which a Delivery Plan is being developed in response to the mandate issued by the Mayor. It is a key vehicle for working in partnership with organisations across the city to tackle structural inequalities. 
4.3.    LAIN also contributes to a range of other Mayoral priorities set out in other programmes within the Mayoral portfolio, including Supporting Londoners to Benefit from Growth. 
4.4.    This project aligns with the London Growth Plan; and the recently published Inclusive Talent Strategy, which calls for increased apprenticeship starts, improved access to childcare (to remove barriers to employment), and employer-led solutions to workforce challenges.
4.5.    The focus on improving employment practice amongst EY providers benefitting from levy transfer also aligns with the Mayor’s commitments to increase ‘good work’ across the city, including via the Good Work Standard.
Consultations and impact assessments:
4.6.    The project has been developed in consultation with employers (LAIN members), EY stakeholders and local authorities.
Conflicts of interest
4.7.    No GLA officer involved in the drafting or clearance of this ADD is aware of any conflicts of interest with the proposals set out in this form. 
 

5.1.    Approval is being sought to spend up to £19,000 from the LAIN programme budget, held within the Economic Development and Programmes Unit. A further £5,000 is  being contributed from the Adult Skills Fund (budget already approved in MD3357: ASF 2025-26 Financial Management). 
5.2.    The procurement will be conducted in line with the GLA Contracts and Funding Code. 
5.3.    The majority of expenditure will be incurred in 2025-26. Future years’ budgets will still be subject to the annual budget-setting process.
5.4.    All appropriate budget adjustments will be made.
 

6.1.    This work will be carried out according to the following timetable: