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The British Retail Consortium (BRC) is calling for changes to the Apprenticeship Levy.

Tillie Demetriou
19 May 2022

The British Retail Consortium (BRC) is calling for the government to make the apprenticeship levy more flexible, this week, ahead of a five-year scheme review.

The new survey showed that some retailers estimated they could create up to 1,000 new apprenticeships each if the apprenticeship levy system was reformed. The retail industry is the UK’s largest private-sector employer.

In their findings report, Apprenticeship Levy - 5th Anniversary Survey, 95% of respondents said the system needs to change, with two-thirds revealing that more than 40% of their levy fund went unspent.

The BRC is calling for the government to make changes to the apprenticeship levy as the current system means that retailers have to pay a 0.5% levy on their annual pay bill, regardless of whether they actually take on any apprentices.

This has resulted in individual retailers losing up to £12m per company in unspent levy funds since 2017, according to the BRC.

The apprenticeship levy was introduced in order to create more apprenticeships and increase skills training across the UK. However, the current system is not working as intended, with many retailers finding it inflexible and difficult to access funding.

The BRC and its members state that if the Apprenticeships Levy was more flexible, it would allow apprenticeship funding to cover pre-employment courses, high quality short courses and the costs of apprenticeship training.

It would also allow levy-payers in devolved nations to directly access the funds, which would create more opportunities for retail businesses to invest in apprenticeships.

BRC chief executive, Helen Dickinson, said: “It is crystal clear that the apprenticeship levy system is not fit for purpose and in desperate need of reform. Hundreds of thousands of pounds are being wasted every month. But this is not just a financial issue, it represents missed employment opportunities, missed training, and missed career progression.

“Retailers want to invest in a higher skilled, more productive, and better paid workforce. They want to create more opportunities and contribute to local communities across the country. However, this broken system is holding them back. If the government is serious about its ‘Levelling Up’ agenda, the levy must be made more flexible so retailers can use the funds for high quality pre-employment courses, short in-work developmental courses and to cover other costs related to training their people,” she added.