£3.3bn in skills funding goes begging over Levy muddle

UK businesses, including those in the advertising and marketing industry, are missing out on billions of pounds in workforce development funding – even as AI and automation rapidly reshape the market – due to a critical “perception gap”.

So says a new whitepaper from digital skills training organisation The Coders Guild, which reveals employer investment in training has declined 18.5% in real terms since 2011, reducing workforce capability and competitiveness.

The study also shows that underutilisation of the Apprenticeship Levy saw over £3.3bn in unused funds returned to the Treasury between 2019 and 2022.

This means that nearly half of UK workers undertaking online training now pay for it themselves, despite being significantly more likely to leave employers who do not support their development.

Meanwhile, UK job postings requiring AI literacy nearly tripled between mid-2023 and late 2024, yet many employers fear technological change may render current skills obsolete.

The Coders Guild maintains that evidence consistently shows UK employers train a smaller proportion of their workforce than many European counterparts.

The whitepaper argues that the transition from the Apprenticeship Levy to a broader Skills Levy has expanded opportunities for mid-career development and role transitions. However, many business leaders still view apprenticeships as entry-level “CSR projects” rather than strategic assets for digital and AI-native upskilling.

The Coders Guild founder Crispin Read said: “Too many employers still don’t understand how the Skills Levy works – or how much support is already available to them.

“We’re seeing businesses pay into a system designed to fund their own workforce development, and then let that money go to waste. That’s a huge, missed opportunity.”

Read insists the urgency for upskilling is driven by the rapid adoption of AI. Tasks such as basic coding and data entry are increasingly handled by tools already generating over 41% of new code in some contexts.

The Coders Guild insists its whitepaper serves as a vital roadmap for UK organisations navigating the “Digital Native Dividend” demonstrating how modern apprenticeships act as a pre-paid engine for executive-level growth rather than a resource drain.

By debunking the ‘stale myths’ of entry-level training and highlighting the £18,000 net benefit that AI-fluent apprentices can bring to a business, the report provides actionable recommendations for employers, government, and individuals to reclaim lost productivity.

In an economy where AI literacy has become a core competency for 45% of global employers, this report claims to outline how to transform the Skills Levy from a complex administrative burden into a high-performance tool for long-term resilience.

Read concluded: “Instead of tapping into fully funded apprenticeships and training, some employers are asking individuals to pay for the very skills their business depends on. It’s not just unfair – it’s inefficient.

“The Government is literally offering funding to build skills and close the talent gap, but if organisations don’t take advantage of it, we end up deepening inequality and losing potential from people who can’t afford to self-fund.”