The Tesco chairman has said that the Apprenticeship Levy is not working and called on the Chancellor to release the review that he promised in the Budget.
John Allan is also the president-elect of the CBI and the chairman of Barratt, the housebuilder. He said that the system will be “fixed within three months” once ministers “put their mind to it.”
Allan spoke ahead of today’s launch of a report that was made by London First, a business lobby where he is the outgoing chairman. London First calls on the Government to clarify the administration of the levy and to make the apprenticeships more flexible to be able to match the modern working life.
Allan stated: “Unlike Brexit, which is difficult and complicated and not entirely in the hands of our Government, the Apprentice Levy is simple to fix.”
He continued: “The Chancellor promised a review in the Budget last November. That as far as we can see has not yet happened.
“It is not working at all well. If you don’t want business to give up on this and treat it as just a tax you have got to make these simple changes. I think most business would agree with it.”
He added: “The sad thing is some businesses are giving up on apprentices altogether and just seeing it as another tax.”
The Tesco Chair said that in London, the problems were particularly acute. He said that the City has roughly half the rate of apprenticeships as the rest of the nation.
The Apprenticeship Levy was introduced more than two years ago. It requires all but the smallest employers to pay 0.5 percent of payroll into a fund that is intended to invest in training and jobs for the young people. Business groups have already become frustrated by the red tape that is being experienced around gaining approval for the schemes and looking for candidates.
London First has proposed some reforms as a part of a series of proposed measures to help in addressing the skills shortage in the United Kingdom. It also urges that a part of the skills budget should be devolved to the Mayor of London in order to take on the problems that are specific to the capital and make the careers advice be a compulsory part of the curriculum of secondary schools.