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The government’s apprentice levy system is ‘broken’ and needs ‘urgent reform’, according to a letter from four trade bodies.
So far, £3.5bn of levy funds have expired under the use-it-or-lose-it scheme as businesses struggled to meet restrictive requirements, the bodies said.
In a letter sent to the government, the British Retail Consortium, UK Hospitality, TechUK, and the Recruitment & Employment Confederation write that investment in critical training, vital to train the future workforce, provide better wages, increase productivity and boost economic growth, is being held back.
Businesses are being blocked from investing in their workforce and creating job opportunities because of “a broken apprenticeship levy system” the bodies added.
The current system requires businesses to contribute hundreds of millions of pounds into a pot, but it only allowed these funds to be spent in “an overly restricted way”.
As a result, £3.5bn of potential investment into the UK labour market had “gone to waste at a time when training is urgently needed”.
The trade bodies called 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 accredited courses or more tailored upskilling programmes.
BRC chief executive Helen Dickinson said: “The government must urgently fix this £3.5bn 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.”
UK Hospitality CEO Kate Nicholls added: “Hospitality businesses are eager to invest more in developing the skills, training and development of their workforce, particularly when vacancies are so high.
“Reform of the apprenticeship levy is urgently needed to offer greater flexibility to businesses, particularly in how funding is used. 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.”
Morning update
The FTSE 100 has rolled back this morning from record highs, dipping 0.5% to 7,859.03pts.
Early risers in grocery include Science in Sport, up 3.7% to 14p, McBride, up 2.2% to 24.3p, Finsbury Food Group, up 2% to 102p, and Nichols, up 1.6% to 1,012.8p.
Fallers so far include Fever-Tree Drinks, down 4% to 1,089p, THG, down 2.9% to 61.2p, Just Eat Takeaway, down 2% to 2,127p, and B&M European Value Retail, down 2% to 483.9p.
This week in the City
As February gets going, events look a little quieter in the City, but there are still some big updates scheduled.
Tomorrow kicks off with Nielsen’s latest monthly grocery till roll figures, while we’ll also get the latest retail sales figures for January from the BRC and KPMG, and the Barclaycard spending data.
Tomorrow also brings quarterly results from Carlsberg and Kraft-Heinz.
Imperial Leather and Carex owner PZ Cussons issues its interims on Wednesday, while packaging firm Smurfit Kappa reports full-year results.
Unilever is due to report its fourth-quarter and full-year results on Thursday, followings its news last week that current non-executive director Hein Schumacher will take over as chief executive from the retiring Alan Jope in July.
L’Oreal and Delivery Hero file quarterly numbers in Europe and Kellogg’s, PepsiCo and Philip Morris will update in the US later in the day.
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