Retailers could have offered 12,000 more apprenticeships over the
past year if it was not for the Government’s failure to reform
the Apprenticeship Levy, according to a survey by the British
Retail Consortium (BRC). The industry took on approximately
17,000 apprenticeships in that period, meaning Levy reform could
boost this by 70%.
A more flexible system would not cost the taxpayer a penny yet
would both boost apprenticeship numbers and open up additional
training opportunities for people in retail, equipping them with
the skills that the economy needs to grow. If the Levy were more
flexible, retailers would have been able to train over 20,000
more people including 7,000 in digital skills, helping the
industry prepare for the huge technological transformation
currently underway.
The survey also revealed how vital reforms would be for
‘Levelling Up’. The Northwest, Northeast, and Yorkshire and the
Humber are among the regions that would see the most significant
rise in training if the Levy funding system was more flexible.
As a result of the inflexible Levy scheme, 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.
This is because the Apprenticeship Levy is a “use it or lose it”
system requiring businesses to contribute hundreds of millions of
pounds into a pot, but only allows funds to be spent in an overly
restricted way. For example, retailers cannot use the money to
fund any courses that are shorter than one
year.
Government must widen the Apprenticeship Levy into a broader
Skills Levy and make it more flexible 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
Apprenticeships are crucial for employees and businesses,
providing vital opportunities for people to get into the
workplace and develop essential skills that will support them
through their careers, but the system that is meant to enable
these opportunities does the exact opposite.
Helen Dickinson OBE, Chief Executive of the British
Retail Consortium, 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. Government must
use the upcoming Budget as an opportunity to introduce the
necessary reforms – it really is a no-brainer.”
