Apprenticeship funds are a waste of £3.5bn, businesses have told ministers.
In a letter sent to ministers, the British Retail Consortium, UKHospitality, techUK and the Recruitment & Employment Confederation said the government was “holding back investment” with its “£3.5bn mistake”.
According to the Co-operative Group, more than £600m in apprenticeship levy funding was “wasted” and sent back to the government last year. It said the money, which could have funded 60,000 apprenticeships, was returned to the Treasury in 2022 because the rules were so rigid that businesses found the scheme unsuitable and irrelevant.
The British Retail Consortium said that so far £3.5bn of “use-it-or-lose-it” funds had expired because businesses were unable to meet the restrictive requirements for drawing on the money they had paid in.
The government levy was introduced in April 2017 and requires employers with an annual wage bill of more than £3m to pay 0.5% of payroll costs into a fund for training.
The trade bodies want the government to widen the apprenticeship levy into a wider skills levy that can be spent on a broader range of accredited courses including shorter, more targeted courses.
