As political parties prepare their manifestos, they must commit
to reforming the broken Apprenticeship Levy to allow retailers to
better upskill and retrain their workforce, increase
productivity, and ensure the industry is equipped to meet the
needs of the economy, now and in the future.
Simple fixes would allow retailers to offer 12,000 more
apprenticeships, particularly in more deprived areas, according
to the British Retail Consortium (BRC).
This call comes as National Apprenticeship Week begins, and the
industry celebrates all its brilliant apprentices.
Apprenticeships provide an excellent opportunity for people to
get into the workplace and develop crucial skills.
Unfortunately, the Apprenticeship Levy – a tax on businesses
aimed at funding apprenticeships - does little to support the
apprenticeships and wider training that retailers, and our
economy, really need. Approximately 40-50% of the current retail
workforce needs upskilling for new, better paid, more productive
roles, and retailers cannot draw on much of their Levy funds for
this vital training.
Not only are opportunities going to waste, but so is over
£130m of potential retail investment into the UK labour
market, equivalent to nearly £400,000 every single day. That is
millions of pounds a year that could have been invested into
our workforce in towns and cities
all over the country.
This is because the Levy’s “use it or lose it” system
requires businesses to contribute hundreds of millions of pounds
into a Levy pot, but funds can only be spent in a very restricted
way. For example, retailers cannot use the money to fund any
courses that are shorter than one year.
Election manifestos must promise to widen the Apprenticeship
Levy into a wider Skills Levy, introducing the flexibility
to:
-
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 suitable.
-
Fund high quality pre-employment courses to
help new hires reach the required level to begin a full
apprenticeship.
-
Allow Levy-payers in Devolved nations
to directly access the funds they are being
compelled to pay as part of the Levy. In these nations, the
Levy is effectively another employment tax, penalising
businesses for employing workers.
-
Provide high-level courses to better reflect employer
needs. Unless employers invest additional funds into
‘bolt-on’ modules for apprenticeships, the apprenticeship
curricula rapidly becomes irrelevant.
-
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.
Retail is the everywhere economy, driving growth and investment
in every village, town and city. Retailers employ more people
than any other private economic sector and provides employment
and career progression for people from all walks of life.
Political parties must commit to reforming the Levy in their
manifestos so retailers can increase and improve the number of
apprenticeships and training opportunities they offer, creating
better jobs, boosting productivity, and helping the economy to
grow.
Helen Dickinson, Chief Executive of the British Retail
Consortium, said:
“A clear plan for economic growth is the key priority of
every political party ahead of the General Election, and
reforming the Apprenticeship Levy is a crucial piece of this
puzzle. The Levy is an inflexible, outdated system, that hinders
retailers from effectively investing in their workforce. It has
deprived tens of thousands of people across the country of
potential apprenticeships and training opportunities and stands
in the way of career progression for many people working in the
industry.”
Paula Coughlan, Chief People, Comms and Sustainability
Officer at Currys, said:
“Due to the inflexibility of the apprenticeship levy system, we
are only able to use less than half of the available funds. One
of the key barriers is the current insistence on 12-month courses
which is ill-suited for today’s workforce. We would like to see
the levy developed into a broader lifetime learning model that
offers flexibility in accessing funds for diverse and relevant
skills courses. Reform to the system is long overdue, and is
essential in order to help companies like ours deliver more
training and in turn support growth and better wages.”
Sue Fox, President, The Estée Lauder Companies (ELC) UK
& Ireland, said:
“We are very proud to offer high quality apprenticeship
programmes that provide exciting opportunities for people to
develop their skills and grow their careers in prestige beauty in
roles ranging from data analytics to content production, digital
marketing and retail.
“We would very much welcome reform of the Apprenticeship Levy to
provide greater flexibility enabling us to support more training
opportunities and broaden our investment in a wider range of
skills needed to contribute to the UK economy.”
