Business chiefs call for action to fix £3.5bn apprenticeships blunder

Helen Dickinson, BRC chief executive

£3.5 billion pounds of Apprenticeship Levy funds have expired under the Government’s use-it-or-lose-it scheme and business chiefs are calling for action to fix this ‘mistake’.

The British Retail Consortium (BRC) has been joined by techUK, the Recruitment and Employment Confederation (REC) and UKHospitality, to send a letter to the Government, accusing it of “holding back investment” in critical training that is vital to train the future workforce, provide better wages, increase productivity, and boost economic growth.

With UK job vacancies at 40% on pre-pandemic levels, says the BRC, “businesses are being blocked from investing in their workforce and creating job opportunities because of a broken Apprenticeship Levy system”.

The BRC accuses the scheme of being overly restrictive, citing the example that businesses cannot use the money to fund any courses that are shorter than one year.

The four trade bodies are calling on the Government to widen the Apprenticeship Levy into a broader Skills Levy to allow businesses to spend their funds on a wider range of high-quality, accredited courses including shorter, more targeted courses, or more tailored upskilling programmes, including functional and digital skills.

The BRC claims this would not cost the Exchequer a penny and that by unlocking that funding, businesses could invest millions more into equipping their workforces with the essential skills and training that the economy needs to grow.

BRC chief executive Helen Dickinson said: “The Government must urgently fix this £3.5 billion mistake, or it risks letting the UK’s anaemic productivity trail further behind its international counterparts. Retailers want to invest more in training a higher-skilled, more productive and better-paid workforce.

“They want to create more opportunities for people up and down the country. They want to contribute more to growth. But the broken Apprenticeship system is a ball and chain around their efforts. Without reforms to the Levy, retail will not be able to turbo-boost equipping its workforce for the future.”

At techUK, chief executive Julian David added: “National Apprenticeship Week serves as a reminder of the work and support apprenticeships and the levy provide for businesses of all sizes. Apprenticeships should be at the heart of the strategy to level up skills across the UK, but there is more we can do to enable businesses to reach, attract and retain diverse talent, and prepare them with the skills they need.

“There is a real need to continue to support young people and new entrants into the workforce using apprenticeships, but also to support those in the existing workforce to progress and acquire the skills they need for the future of work. The key to this will be to reform the apprenticeship levy to make it flexible and fit-for-purpose.”

This letter to the Government comes as BiKBBI chief executive Damian Walters, speaking at its annual conference yesterday, referred to the “chronic lack of new installers coming through apprenticeship schemes” and called for the KBB industry was “to wake up, smell the coffee and take immediate action, without further delay.”

As early as the end of 2021, Walters had warned: “The Government has been ultra-clear with its ‘use it or lose it’ policy. Institutes are important for all the reasons stated, but unless the industry adopts it, funding for it will be withdrawn – and that is worrying as we have no plan B, and the clock is ticking.”

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