Train your team for free: the money hospitality keeps leaving on the table

Every year, millions of pounds set aside for training simply vanishes. Large businesses with payrolls over £3 million pay into the Apprenticeship Levy whether they like it or not, and a remarkable number of them never spend what they've contributed. When the clock runs out, that money doesn't get redistributed or reinvested; it disappears back into a government black hole. 

Here's the part that should make every independent operator sit up: those unused funds can be gifted to smaller businesses, meaning you can access virtually free, fully funded training for your team. The problem is that hardly anyone knows this, and even fewer know where to start. There's also a lingering assumption that apprenticeships are only for school leavers washing pots, when in fact the levy can fund learning and development right up to management level, for the people you already employ. It's far easier to access than you'd imagine, and given the alternative is watching that money evaporate, there's really no reason not to. Ella DeBeer from Electric Mayonnaise explains how it works:

What is the Apprenticeship Levy?

The Apprenticeship Levy (which is being renamed the Growth and Skills Levy) is essentially a tax that employers pay into. Any company with a payroll over £3M pays 0.5% of their payroll into the levy. As you can imagine, that adds up to quite a lot of money each year, and it builds up monthly in a digital pot.

That money is then available to use for 24 months. After that, anything left disappears back into a government black hole. That window is also shrinking: for new funds entering accounts from August 2026, it drops to just 12 months, so there’s more pressure than ever to actually use it. Even if your payroll is under £3M (an SME), you can still take advantage of it.

At the moment, non-levy paying businesses contribute just 5% of training costs, with the government covering the other 95%. And from August 2026 it gets even better for smaller employers: if your apprentice is under 25, the employer contribution disappears entirely and the government funds 100% of the training. For apprentices aged 25 and over, the 5% contribution still applies.

There’s also the option of getting levy funding gifted from larger companies that aren’t using theirs (and a lot of them don’t). More on exactly how that works below.

How It Actually Works

Once you’re contributing to the levy (or if you’re a small business that just wants to use levy funding), you can set up a Digital Apprenticeship Service (DAS) account. This is basically your online portal where you can:

• See what funds you’ve got
• Choose training providers
• Recruit new apprentices or upskill your existing team

It’s pretty easy to set up. You just need your Government Gateway login, Companies House number and PAYE details. Then you’ll sign an agreement with the ESFA (the Education and Skills Funding Agency) and you’re good to go.

Once you’ve chosen a training provider, they draw the funding directly from your levy pot, so there’s not much admin on your side after that. If you’re not levy paying, the training provider will invoice you for your contribution (where one applies) and the rest will be funded through the levy.

Getting the Levy Gifted

This is the bit most people don’t realise exists, and it’s the closest thing hospitality has to free money.

Large employers can transfer up to 50% of their annual levy funds to other businesses, and any business can receive them, no matter how small. All you need is that apprenticeship service account, which you’ll have set up anyway.

There are two routes in:

• A direct connection. If you already know a levy-paying business (a supplier, a landlord, a big group you have a relationship with), they can transfer funds straight to you using your apprenticeship service account ID. It’s all managed through the portal: they set up the transfer connection, you accept it, and together you agree the apprenticeship and training costs being funded.
• Public pledges. Large employers list their unspent funds on the apprenticeship service, often with a preference for a particular region, sector or type of apprenticeship, and smaller businesses apply. Companies like the Co-op, Royal Mail and Aldi have all made their unspent levy available this way, so it’s worth searching the pledges for one that fits your business.

Transferred funds cover 100% of training and assessment costs, up to the funding band maximum for that apprenticeship. Two things to know: transfers only apply to new apprenticeship starts (though a “new start” can absolutely be an existing member of your team beginning a programme), and you’ll still be paying your apprentice’s wages, including their off-the-job hours. But the training itself won’t cost you a penny.

Who are Apprentices?

Apprenticeships aren’t just for young people. In hospitality we still tend to picture apprentices as school leavers, but that’s a misconception.

You can use the levy to upskill your existing team, which is where we at Electric Mayonnaise focus. It’s a really useful way to support L&D, especially when budgets are under pressure (which they are for most people right now).

Most of what we see tends to sit across these levels:

• Level 2: Commis Chef, Production Chef or Team Member. (We’re launching a Production Chef programme this year. It gives us a lot more flexibility than the traditional route and works better for modern kitchens.)
• Level 3: CDP (and the FOH equivalent).
• Level 4: Supervisor. (This is roughly foundation degree level. We’ve currently got 100 learners on our Future Leaders programme.)
• Level 5: Degree-level programmes, like our Level 5 Coaching Programme. Be aware, though, that the government is pulling funding from a number of Level 5 to 7 programmes from September 2026, so if a higher-level programme is on your radar, the time to start one is now. Anyone who begins before the cut-off is funded through to completion.

But the levy can be used for much more than traditional apprenticeships: things like social media and marketing, finance, HR and craft-based roles. There’s also a massive push on AI-based apprenticeships.

So it’s not just chefs and front of house. It can support lots of areas of the business, and people wanting to cross-train or change direction.

To this end, it’s a great tool for retention. It can keep employees engaged (even if their apprenticeship isn’t in their day-to-day job role) and motivated at work, at little cost to the employer.

What is the Catch?

The biggest sticking point for employers, especially hospo operators, is the time commitment. Anyone on an apprenticeship needs to do “off-the-job” learning, which works out at about 6 hours a week (paid).

That said, it’s not necessarily off the job in the way people think (at home at a desk). It just means learning that sits outside their day-to-day role, so they can show development.

For example, with Electric Mayonnaise:

• We run one workshop a month
• Learners then complete practical projects at work

The off-the-job hours look like:

• Writing rotas and working to budgets
• Sitting in on HR meetings and taking minutes properly
• Working in a different department
• Recruiting and onboarding a new employee

Over time, they build up a portfolio of work that forms part of their qualification. But that 6 hours a week is paid time that the employer is committing to.

What is Changing?

There have been some big changes this year, with more landing over the next few months. The headlines:

• For new funds from August 2026, the window for spending your levy pot halves from 24 months to 12.
• From August 2026, training for apprentices under 25 becomes fully government funded for non-levy SMEs, with no employer contribution at all.
• Funding is being pulled from a number of Level 5 to 7 programmes, with 16 standards (particularly in leadership and management) defunded from September 2026. Existing learners are protected to completion.

The government’s direction of travel is clear: the focus is on young people and getting them into employment.

They’re introducing a foundation apprenticeship, which is only 8 months long and aimed at 16 to 24 year olds. This will be the shortest apprenticeship in hospo so far, and guidance was released in July 2026.

Employers will be incentivised to take on young people. From October 2026, non-levy SMEs can claim a £2,000 payment for each new apprentice they hire, paid in two instalments through your training provider, with further funding available where the apprentice is long-term unemployed or from a care background.

If you’re taking advantage of this apprenticeship you could consider paying the apprentice rate, which is £8 per hour and applies to anyone under 19, as well as to older apprentices in the first year of their programme. Since the foundation apprenticeship only lasts 8 months, that rate can apply for the whole thing, even for your 18 to 20 year olds (who would otherwise be on £10.85). These young people will genuinely be unskilled, and as an employer you’ll be investing real time in getting them up to speed, so the apprentice rate exists for exactly this situation.

So between the grant, the fully funded training and the lower wage bill, this could be a genuinely meaningful way of reducing labour costs in your business. 

So, Should You Do It?

We should be honest about both sides of the ledger.

The case against boils down to one thing: time. Those 6 hours a week of off-the-job learning are paid hours, and you're carrying the wage bill throughout, which in a small team with a tight rota is a genuine commitment, and there's a little setup admin at the start.

The case for is everything else. The training itself can cost you little or nothing: fully funded for under-25s from August, 95% funded beyond that, and completely covered where a larger business gifts you their unused levy. It works for the team you already have, right up to management level, which makes it one of the only serious L&D options available to an independent operating on independent margins. It keeps good people engaged and progressing, which is worth more to retention than most pay rises. And if you're taking on young people, the grants and the apprentice rate genuinely bring your labour costs down while you do it.

Weigh those against each other and the maths is hard to argue with: you're trading a few structured hours a week for trained, motivated people and training bills that someone else is largely footing. Meanwhile, every year, money that could be developing your team drains back into a government black hole because nobody claimed it. The window for using it is about to halve, so don't wait for a quiet January to look into this. Set up the account, find a provider, and use what's yours.