Firms missing out on talent as apprentice levy cash 'expires'

BUSINESSES in London are missing out on hiring vital new talent because huge sums raised by a government scheme to fund apprenticeships are not being spent, according to trade bodies and employment organisations.

- Rhiannon Curry

In National Apprenticeship Week, representatives from the retail, hospitality, tech and recruitment sectors have called on ministers to reform the apprenticeship levy programme.

It is feared that hundreds of millions of pounds are going to waste in the capital alone because private and public sector employers struggle to spend it, largely due to complex restrictions.

The levy, introduced in 2017, requires employers who spend more than £3 million on pay each year to put aside 0.5% of their pay bill for apprenticeships This money must be spent within 24 months after which it expires and is returned to the Treasury, although up to 25% of it can be shared with other partner organisations. However, some say the limits on how the money is spent prevents it from being effective.

In a letter sent to the Government on Monday, the British Retail Consortium, UKHospitality, techUK, and the Recruitment & Employment Confederation said ministers were effectively "holding back investment" by making it difficult to spend the money.

Anna Ambrose, director of business support group London Progression Collaboration, said the capital's need for apprentices was acute, particularly in construction, social care, and nursery and pre-school education.