The Importance of Level 3 Apprenticeships in Retail
The Growth and Skills Levy
The Growth and Skills Levy has replaced the Apprenticeship Levy, but the way it works is largely similar. Large employers pay a proportion of their payroll into the Levy each year, with the idea being that this funds training and development for those employers, as well as SMEs. Retailers contribute significantly to the Levy, with the largest contributing millions of pounds each year.
The BRC has long been calling for the Levy to be made more flexible so that more of it can actually be used for the upskilling of colleagues. Previously, funds were difficult to access and wrapped up in many layers of rules and restrictions. The funds could only be spent on full-length apprenticeships, which, whilst beneficial for some people, limit the use of funds in practice due to the significant associated costs with taking someone off the shop floor for off-the-job training.
Having said that, retailers often make that extra investment to create strong development pathways from entry level through to senior leader. A huge amount of work has gone into professionalising the sector and promoting it as a career of choice. Whilst retail is an important entry point for millions of young people - recent BRC research found that one in five people had their first job in retail - the industry has also built strong development pipelines for young people to come into the workforce at an entry level, and to successfully progress through an organisation.
Levy reforms have not delivered the promised level of flexibility
The calls from the retail industry and others to improve the Levy's flexibility seemed to have been heeded by government, and there has been some positive change: with shorter minimum apprenticeship lengths, and some movement towards the availability of apprenticeship units.
Given the increasingly concerning figures on the number of young people not in education, employment or training, the government is increasingly pivoting to focus on increasing levels of youth employment. This has been reflected in Levy reforms, with the removal of funding for Level 7 apprenticeships, and the introduction of foundation apprenticeships, including for retail. Most significant, however, was the announcement to defund leadership and management apprenticeships, which will leave a significant hole in retailers' established and valued programmes, ultimately hindering progression opportunities for young people.
The Level 3 Team Leader apprenticeship is vital for the progression of young people in retail
Level 3 apprenticeships are the most obvious stepping stone following the completion of a foundation or a Level 2 apprenticeship. They can be taken without taking a Level 2 beforehand, but it is also a clear and natural progression point for those who choose to do so.
Previously, retail had a sector-specific Level 3 Team Leader apprenticeship which was well used and valued. In 2025, retailers agreed to the defunding of L3 Retail Team Leader on the condition that the broader Level 3 Team Leader standard would be introduced and would broadly fulfil the same purpose.
Fast forward to March 2026, and it was confirmed that Level 3 Team Leader will now also lose its funding. Whilst the change will not officially be introduced until September, a cap for training providers on new starts (introduced following the significant impact in Level 7 starts when their defunding was announced last year) has in practice turned this into an overnight change which has had a huge impact on established programmes that retailers have delivered for years.
These changes have been made with no consultation and no clear alternative development pathway in place, which has ultimately resulted in the immediate removal of progression opportunities for young people.
Why government should reinstate Level 3 Retail Team Leader
Level 3 Team Leader has been removed because of the perceived benefit for young people being too small, and because of the belief that funding for leadership and management training should come from employers rather than from government. However, this ignores some important points:
- The Growth and Skills Levy is, by definition, paid for by employers - it is not government funding, but money that employers legally pay into the skills and apprenticeships system.
- Retail hires a disproportionate number of under 25s compared to other industries, and in turn have a much higher proportion of under 25s on Level 3 apprenticeships than the national average.
- Even if the level of under 25s on Level 3 apprenticeships was negligible, the role of skilled managers in supporting young people into work - especially those from vulnerable groups and/or with no experience of employment - cannot be understated.
Ultimately, retail plays a huge role in the development of young people in the UK. The Growth and Skills Levy should complement this and allow retailers to take their skills and development offers to the next level, but the reforms will not achieve this in their current form. As a first step, the Level 3 Retail Team Leader should be reinstated as a vital part of the development pathway for young people.
We are currently in the process of engaging with government and Skills England with regards to Level 3 Retail Team Leader and other priority areas. If you are interested in getting involved, please do get in touch with me on ben.george@brc.org.uk
