Co-op Group calls for action to unlock millions in unspent apprenticeship funds

'Business can play an important role in ensuring everyone has an equal chance to fulfil their potential, no matter who they are or where they come from'

The Co-op has hailed the success of its Co-op Levy Share service, which it says will create nearly 1,000 apprenticeships – but warns that millions in funds are going unspent by businesses.

Almost eight million pounds has been pledged by more than 30 businesses to the Co-op Levy Share service, launched last year by the Group last year to enable businesses across England to pledge their unspent levy, which would have otherwise expired. This means the money will fund more apprenticeship opportunities for people in underserved communities who would otherwise struggle to find a career path, the retailer says.

Major businesses including Mastercard and Direct Line Group are among those who have pledged to the service so far. As a result, the Group says it has been able to support apprenticeships in 35 different occupations outside of its core businesses, including care, construction and engineering.

But it says millions of pounds are being left unspent by businesses every month, because of how the government governs the levy.

Currently, businesses can only share up to 25% of their levy funds, with any funds not spent or shared being sent back to HM Treasury. As a result, last year alone, over £250m was sent back to HM Treasury which, argues the Group, could have funded over 25,000 apprenticeships.

Now the Group is calling for an urgent reform on the apprenticeship levy, making it more flexible and increasing the 25% cap on the amount that can be shared to 40%.

Research from Co-op’s Ghosted Generation Report shows that whil two fifths (40%) of young people want to be an apprentice, uptake of entry level apprenticeships across England has fallen by 25% since 2018 as businesses turn to offering higher level qualifications instead.

The pandemic has had a catastrophic impact on young people’s education and career pathways, the report warns. Almost a third (29%) of 13 to 25-year-olds feel the pandemic has made them less likely to continue with further education and over a quarter (26%) stated that their career aspirations have been ruined as a result.

The Group is suggesting that as part of the government’s levelling up strategy for disadvantaged communities, changes are needed to its apprenticeship policy:

  • Stronger focus on entry level apprenticeships, a crucial ‘stepping stone’ into established career paths
  • Clear geographic targets for where apprenticeships need to be created and are most needed
  • Encourage local employers to work with local government and mayors to create apprenticeships that are right for the local community
  • More flexibility within and an extension on the current levy’s expiry
  • Collaboration between employers to drive the growth of new apprenticeships should be encouraged

Co-op Group CEO Steve Murrells said: “Business can play an important role in ensuring everyone has an equal chance to fulfil their potential, no matter who they are or where they come from.

“The current apprenticeship levy can incentivise a business to invest in its people, but the government need to trust businesses to make apprenticeships truly accessible and ensure that opportunities are distributed fairly so that we as a country can level up.

“With changes to the apprenticeship policy and more flexibility, I know that the Co-op and other businesses could increase the number of apprenticeships each year by 40% – which would bring an established career and bright future for thousands of young people.”

Alun Francis, deputy chair, Social Mobility Commission, said: “Apprenticeships offer a non-degree route to higher skills, and if targeted at those with high potential but fewer opportunities, can be a valuable tool to promote social mobility. Government, employers and education institutions all have a crucial role to play in ensuring the apprenticeship system delivers on this, with a clear focus on developing local skills and meeting local needs.”

Zafeerah Bagas, 16, is a Level 3 advanced metal fabricator apprentice at William Hare in Bury. Through the Co-op’s Levy Share, levy funds from the UK’s largest recruitment agency, Pertemps, has funded Zafeerah’s assessment and training at a cost of £27,000. Without the levy her apprenticeship wouldn’t have been possible.

She said: “When I first left school, I was at a bit of a crossroads. I’d always been practically minded and when I was younger, I used to play with a toolbox – so that’s when I knew I wanted to get into engineering. I’m the first in my family to have an interest in engineering and my apprenticeship has provided me with opportunities I never thought would be possible. And now, my dream is to run my own engineering company one day.”

To learn more about apprenticeships at the Co-op, please visit:

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