Trade associations have called on a widening of the Apprentice Levy to help fill employment gaps.
In a joint letter to Members of Parliament, leaders from the British Retail Consortium, techUK, UKHospitality and the Recruitment and Employment Confederation have urged the government to expand the levy and allow businesses to spend funds on a wider range of courses.
The calls for reform come at a time when Office of National Statistics (ONS) figures show UK job vacancies outstripping those seeking employment.
According to the letter, funds can only be spent in a narrow way and the scheme is “currently holding back investment”.
Specifically, the trade bodies believe up to £3.5bn in investment has been lost since 2019 as the money cannot be spent on short, modular courses and online learning.
Reforming apprenticeship funding to cover a wider range of skills and course types would ensure more existing funds are used in creating opportunities.
“These proposals would unlock that funding, allowing businesses to invest many millions more in the essential skills and training the economy needs to grow,” the letter said.
The scheme is paid for by businesses under the Apprenticeship Levy, not the government, meaning it is revenue-neutral for the Exchequer.
Currently, firms will invest millions into a pot which can then be spent on specific courses.