Retailers including Tesco, M&S and Asda have called for an overhaul of the apprenticeship levy, terming the scheme “broken” and “restrictive”.
The retailers have said that while they pay in millions of pounds to the government funding pot, rules limit them from using this, This is Money reported.
Currently, firms with a wage bill above £3m must pay a levy of 0.5% of their annual payroll into the fund, which is meant to help smaller businesses hire and train more young people.
However, many retailers have criticized the scheme as according to the British Retail Consortium, around £130m of potential investment in jobs is wasted due to limitations, such as businesses being unable to fund training courses shorter than a year long.
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This month, Tesco group chief executive Ken Murphy said: “Despite the best intentions, I don’t think it’s delivering for the youth of this country.
“Businesses like ours are in a position to really influence the training and development and career of young people in this country [but] we need the money to do so.
“Every year the government takes more than £20m from Tesco but returns just under £3m for it to use on training schemes.”
In March, M&S CEO Stuart Machin called for changes to the “broken” apprenticeship levy and said that current government policy “makes being an employer of people and running stores really hard.”
He urged for the government to commit to reforming the levy which he said would “unlock the opportunity for thousands more to learn as well as earn in the retail sector.”
A spokesperson for Asda told This is Money that it can only use 27% of its levy funding, adding “‘it is time for the government to review and reform the restrictive apprenticeship funding rules, to remove any unnecessary obstacles to levy spending”.
However a Department for Education spokesman told the publication: “The levy has enabled us to increase investment in apprenticeships to over £2.7billion a year by 2024-25.”
