Retail trade unions have urged the UK government for urgent reform to the apprenticeship levy system if it wants to unlock economic growth.
Unions including UK Hospitality, TechUK and the Recruitment & Employment Confederation (REC), have therefore slammed the government for “holding back investment” in training.
According to the British Retail Consortium’s (BRC) CEO, Helen Dickinson, which is one of the trade bodies which have signed the letter, the current system is too restrictive and is “holding back” employers from investing funds more flexibly.
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“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,” Dickinson said.
“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.”
She added: “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.”
Under the current scheme, all businesses with an annual payroll above £3 million will have to pay the monthly levy towards an annual allowance that can be reinvested in apprenticeship training.
However, these firms are not allowed to carry over any unused funds into the next tax year, resulting in around £3.5 billion in expired funds going to waste since 2019.
UK Hospitality’s CEO Kate Nichols concluded: “A much-needed overhaul of the system would enable businesses to go even further in their skills investment and deliver huge benefits for the wider labour market too, particularly in helping over-50s and the wider group of economically inactive back into work.”
