Government should introduce restrictive apprenticeship levy, trade groups and Labor say

Labor wants to create a new body to improve the skills of the British workforce and encourage apprenticeships.

The party said the government’s apprenticeship scheme did not provide enough skilled labor for the 40,000 manufacturers and promised to change the way the levy is spent and create a new organization called Skills England.

The Apprenticeship Fee charges employers 0.5% of their salary each month if their payroll exceeds £3m per annum.

Companies that pay into the bank can use the money to fund apprenticeships.

Sir Keir Starmer unveils his plan to convert the internship fee into a “growth and development tax” at the new Science, Technology, Engineering and Mathematics Research Center in the Southwest, along with Jonathan Reynolds, Shadow Business Secretary.

The four leading trade associations are also calling for urgent reform of the “broken” apprenticeship pay system at a time when the UK job market remains historically tight.

To date, £3.5bn of funds under the Use it or Lose it scheme have been confiscated because companies have not met the restrictive requirements they must meet in order to redeem the funds they have deposited.

In a letter to the government, the British Retail Consortium (BRC), UKHospitality, techUK and the Recruitment and Employment Confederation (REC) say the government is “holding back investment” in the necessary training needed to educate the future workforce. raise wages, improve productivity and stimulate economic growth.

The letter comes as the number of vacancies in the UK has risen to 40% of pre-pandemic levels and the outlook for economic growth has dwindled.

ONS data showed that unemployment rose by 0.2 percent between September and November 2022 compared to the previous three-month period.

The large number of vacancies, combined with the relatively low number of layoffs, shows that recruitment is a top concern for companies.

However, companies say they cannot invest in their workforce and create jobs because of a flawed system.

The current system requires companies to pool hundreds of millions of pounds, but it allows these funds to be spent in an unduly limited manner.

For example, companies cannot use the money to fund courses that last less than a year. As a result, £3.5bn of potential investment in the UK labor market has been lost at a time when training is badly needed.

Industry groups are calling on the government to expand the tuition fee to a broader skills fee so that companies can spend their money on a wider range of quality accredited courses, including shorter, more focused courses or specialized training programs. including functional and digital skills.

These changes won’t cost the Treasury Department a dime, but freeing up these funds will allow companies to invest millions more to equip their workforce with the necessary skills and training needed to prosper the economy.

Helen Dickinson, OBE, chief executive of the British Retail Consortium, said: “The government needs to correct this £3.5bn mistake.

“Retailers want to invest more in training a more educated, productive and well-paid workforce. But a broken education is everything and the end of all their efforts. Without Levy’s reforms, the retail industry will not be able to boost its workforce to prepare it for the future.”

A separate survey conducted by the London Progression Collaboration ahead of National Apprenticeship Week found that more than three-quarters of the population (78 percent) felt they could not live on the minimum wage for an apprenticeship.

More than six in ten people (61 per cent) think the minimum wage for apprenticeships, which currently stands at £4.81 an hour and will rise to £5.28 an hour in April, is too low. Two-thirds (66 percent) believe that the national minimum wage should replace the education minimum wage.