The UK’s largest supermarkets have told government ministers that reforming the apprenticeship levy would help remedy ‘critical’ labour shortages.
The 10 signatories to the letter include Asda, Morrisons, Tesco, the British Rail Consortium (BRC), the National Farmers Union and UKHospitality, who agree that reforming the levy would help close skills gaps in the food supply chain.
The apprenticeship levy, introduced in 2017, requires employers with an annual wage bill of more than £3m to pay 0.5% of payroll costs into a fund for training. It has remained controversial ever since its inception with many in the sector arguing it the money does not trickle down to fund schemes, there is too much bureaucracy, it is too restrictive, and it should ringfence funding for 16 to 18-year-old apprentices.
The signatories argued the levy should be altered to help employers reduce labour shortages and give businesses the opportunity to use the money to fund courses shorter than one year.
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Helen Dickinson, chief executive of the BRC, told The Times: “Why is it the very system that exists to enable training opportunities serves as the total opposite? Businesses across the food supply chain have long been calling for reform to the apprenticeship levy.
“The government should stop dragging its feet so businesses can upskill our workforce, help safeguard food security in the UK, streamline costs and respond to the needs of the economy. The apprenticeship levy is nothing more than a tax on business and it must be reformed.”
A broader skills levy would allow businesses to spend their funds on a range of accredited courses. This could involve shorter upskilling programmes, including on food safety, hazard analysis, first aid and driving farm machinery.
Tom Bradshaw, deputy president of the NFU, said: “Unlocking the money that levy-payers have not been able to use would be a positive step and could help to provide much-needed flexibility in delivering apprenticeship training.
“Reforming the apprenticeship levy is crucial to get young people involved in farming and the wider food supply chain, as well as up-skilling those already in the industry. We need to find better ways to support our future workforce because those people working within the food and farming sector, worth more than £128bn to the national economy.”
The letter was signed by Aldi, Asda, Lidl, WM Morrisons, Marks & Spencer, Sainsbury’s, Tesco, BRC, NFU and UKH.
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