High street losing out on £3.5bn apprenticeship funding due to red tape

Signatories from the British Retail Consortium (BRC), UKHospitality, TechUK and the Recruitment & Employment Confederation (REC) have accused the government of “holding back investment” in training and said billions of pounds worth of funding has expired under its restrictive use-it-or-lose-it scheme.

The letter said that essential training needed to develop these industries’ future workforces, increase wages and boost the country’s productivity and economic growth had, as a result, been hampered. 

Under the current system, businesses are required to contribute hundreds of millions to the fund but can only spend these funds in a restricted manner – for example, businesses cannot use the money to fund any courses that are shorter than one year in duration.

This has resulted in £3.5bn of potential investment going unused at a time when businesses could benefit from training. 

The trade bodies asked the government to widen the apprenticeship levy into a broader “skills levy”, which will allow businesses to spend the funds on a ”wider range of high-quality, accredited courses including shorter, more targeted courses or more tailored upskilling programmes, including functional and digital skills.”

Helen Dickinson, chief executive of the BRC, 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.” 

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