Retailers call for overhaul of ‘broken’ apprenticeship levy
Companies with a wage spend of over £3m are required to pay a levy of 0.5% of their annual payroll into the government fund
Large retailers such as John Lewis, Tesco and M&S have called for the apprenticeship levy to be overhauled as the current system is “a complete waste of money”, This is Money has reported.
It is understood that the retailers believe the rules around the apprenticeship levy limit them from using funding, despite having paid in millions of pounds.
Companies with a wage spend of over £3m are required to pay a levy of 0.5% of their annual payroll into the government fund.
The money is meant to help companies – especially smaller ones – hire and train more young people.
However, the retailers have argued that the system is broken as it is too restrictive, saying that they cannot fund training courses shorter than a year.
The British Retail Consortium found that approximately £130m of potential investment in jobs goes to waste due to these limits.
As a result, these major retailers say the levy is “simply an extra cost” at a time when they are already facing higher property bills and base wages.
Ken Murphy, CEO of Tesco, 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.”
He added: “Every year, the government takes more than £20m from Tesco but returns just under £3m for us to use on training schemes.”
A Department for Education spokesman told This is Money: “The levy has enabled us to increase investment in apprenticeships to over £2.7bn a year by 2024/25.”
