Yahoo Finance 12,000 apprenticeships lost every year due to 'inflexible' levy, say UK retailers
Thousands of UK apprentices are missing out on vital training as a result of the government’s failure to reform the Apprenticeship Levy, according to the British Retail Consortium (BRC).
UK retailers could have offered 12,000 more apprenticeships over the past year if it wasn’t for the inflexible Levy scheme, according to a BRC survey.
The industry took on approximately 17,000 apprenticeships in that period, meaning reform of the Levy could boost numbers by 70%.
With more flexibility, retailers could offer training to over 20,000 more people including 7,000 in digital skills, helping the industry prepare for technological transformation, according to the BRC.
Over £200m of potential retail investment into the UK labour market has gone to waste over the past 12 months, equivalent to nearly £500,000 every single day, the BRC said.
The Apprenticeship Levy scheme was introduced by the government in 2017, to create long-term sustainable funding for apprenticeships and to give employers more control over providing their staff with a range of training opportunities.
It is a tax payable by all employers with an annual pay bill of more than £3m and is used to fund apprenticeship training.
However, retailers have said that the scheme lacks flexibility due to its “use it or lose it” system, requiring businesses to contribute hundreds of millions of pounds into a pot, but restricting control on how it's spent.
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Retailers have reported that they are unable to use the money to fund any courses that are shorter than one year.
The BRC said a more flexible system would not cost the taxpayer, but would boost apprenticeship numbers and open up additional training opportunities for people in retail.
The research found that the Northwest, Northeast, and Yorkshire and the Humber are among the regions that would benefit significantly from the Levy scheme.
Helen Dickinson, chief executive of the BRC, said: “It could not be clearer that reform is needed. Tens of thousands of people up and down the country are missing out on apprenticeships, training and career progression.
“Retailers are blocked from investing in their workforce; harming productivity, wages and the government’s levelling up agenda."
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The BRC said that the government should use the upcoming budget as an opportunity to introduce the reforms.
It is urging the government to:
Fund high quality pre-employment courses to help potential apprentices reach the required level to begin a full apprenticeship
Allow apprenticeship funding to cover some costs associated with hiring an apprentice, for example covering the cost of back-filling roles while apprentices are on off-the-job training
Provide high-quality short courses, including functional and digital skills, to allow existing employees to upskill or transition to new roles, where a full apprenticeship is not necessary
Allow Levy-payers in devolved nations to directly access the funds they are being compelled to pay as the Levy in these Nations is effectively another employment tax, penalising businesses for employing workers
The BRC said that the system should enable retailers access to provide vital opportunities for people to get into the workplace and develop essential skills that will support them through their careers.
Watch: Apprenticeship levy not fit for purpose, says Labour
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