- Businesses are desperate for an overhaul
- Money collected from the current levy ends up wasted
- Country faces shortages of workers
Leading firms including McDonald’s and Currys believe apprenticeship reforms are key to unlocking economic growth.
Businesses are desperate for an overhaul as money collected from the current levy ends up wasted while the country faces shortages of workers.
Big names such as Tesco, B&Q owner Kingfisher and Halfords want more flexibility. For example, bosses want course length rules axed so they can train older workers in digital skills in less than a year.
Since 2017, a combined £2billion of funds have been returned to the Treasury because firms are constrained by stringent rules surrounding the apprenticeship levy. The number of entry level apprentices has plunged.
Labour pledged to reform the levy in the King’s speech and last month Sir Keir Starmer launched his new Skills England body to reduce an ‘over reliance’ on overseas workers.
Reforms: Since 2017, a combined £2billion of funds have been returned to the Treasury because firms are constrained by stringent rules surrounding the apprenticeship levy
Alistair Macrow, chief executive of McDonald’s in the UK and Ireland, told The Mail the levy ‘needs to be more flexible.’
‘Allowing for more money to be spent on a wider range of courses and ensuring more of the costs associated with employing an apprentice are covered by the levy would be a good start,’ he said.
One example of a cost is when an apprentice has to take a day off their job to be educated and a business needs to hire cover.
Although McDonald’s wants to use unspent levy money to fund 500 youth work qualifications, Macrow says this is ‘difficult because of the barriers created by the existing levy.’
Firms also want devolved nations to be able to use the cash pot.
Chancellor Rachel Reeves has insisted she will steer the most ‘pro-growth’ Treasury ever.
But she faces an uphill battle in convincing swathes of ‘economically inactive’ individuals back into the workforce.
Currys believes reforms will help recruit older people. And Kingfisher said it will help with a shortfall of tradespeople, which is set to cost £98bn in missed economic growth by 2030.
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