The Co-op Group has called for an urgent review of the apprentice levy system, introduced by the government last year to fund employment training.
Under the levy, employers with a pay bill of more than £3m a year must pay into a fund for apprenticeship schemes. Since its introduction, it has come under fire from business groups such as manufacturers’ organisation EEF, and the CBI.
Critics say it is overly complex and fails to persuade employers, who often see it as just another tax, to take on apprentices. In February this year, it was reported that the number of new apprenticeships had dropped by 30% on the previous year.
Now the Group – which has itself employed more than 4,000 apprentices since 2011 and calls itself a “front runner” in hiring apprentices, has called for an overhaul.
It says around 400 more placements if there were some basic changes to the levy – such as allowing firms to use the fund to cover costs such as travel and accommodation on training courses.
Helen Webb, chief people officer at the Group, said: “We share the government’s vision, but there needs to be an urgent review of how the levy works in practice.
“We support the principle that 20% of an apprentice’s time is spent off the job in training, but funding guidelines mean that we can’t use our levy.
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“This costs us more than £5m a year to finance our apprentices when they are out of the business, reimbursing their travel costs or paying for someone to cover their duties.
“Our business is currently having to spend an additional £3.2m to support these costs as it can’t be claimed through the levy. If we could use the levy to cover these costs we could offer up to 400 more apprenticeship roles.”
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