Retailers started paying into the Apprenticeship Levy in 2017. This month, the first unused funds will expire from employers’ accounts and be taken back by the government. Two years on from the introduction of the Levy, we ask are apprenticeships delivering for the industry?
This month we brought 12 retailers together with cross-party MPs in the House of Commons to talk about how apprenticeships work for retail. The room was a hive of activity with apprentices taking centre stage to talk about how their training is supporting their careers, and MPs querying what, if anything, retailers need to support more colleagues undertake apprenticeship training.
The apprentices at the event highlighted the range of apprenticeship opportunities the retail industry offers. From data to engineering, people management to supply chain the retail industry offers a diverse range of standards. In the last academic year (2017/18) there were more than 9,000 apprenticeship starts on the specific retail standards alone. Advanced level retail (Level 3) apprenticeship starts have grown by 20% while higher level starts (Level 4+) in retail have increased nine-fold.
Although the overall number of starts has fallen as employers and training providers adjust to the new system, early signs from this academic year are positive with nearly 4,000 apprenticeship starts between August and October 2018. The latest BRC survey further demonstrates the industry’s appetite for apprenticeships with 95% of retailers reporting they are planning to increase their apprenticeship offering over the next two years.
The atmosphere at the event and the enthusiasm BRC members have for apprenticeship training demonstrate they are delivering for retail. When we asked what benefits retailers saw from apprenticeship training, employers highlighted a range of benefits. From upskilling to supporting retention, apprenticeships are being used by retailers to future-proof their business and support their colleagues develop skills for the future.
A survey of BRC members revealed that 70% of apprenticeship starts in the last 12 months have been undertaken by existing staff. It’s clear that apprenticeships in retail deliver for all ages, not just those entering the labour market. Retailers also see apprenticeship training as a way to meet critical skills gaps and create a talent pipeline within their business.
But we also know that the new system remains far from perfect. Retailers point to the inflexibility of the funding rules as the biggest challenge facing the industry. Inconsistency across the UK also remains a key challenge for national retailers paying a UK wide tax but wrestling with devolved skills systems.
Looking ahead, the industry’s appetite to use apprenticeships and fully embed the new system is clear. However, with estimates from the National Audit Office that levy payers used just 9% of the funds available to them in 2017/18 its clear that reform is needed to unlock future investment in skills.
While increasing the proportion of levy funds that can be passed to other employers is a step in the right direction, five in ten retailers told us that they were unlikely or very unlikely to pass on levy funds. Instead, retailers would like to see greater flexibility to spend levy funds on costs associated with apprenticeship training in the immediate term to enable them to grow the number of starts.
Two years on, we know the government are taking stock of the current apprenticeship landscape. The Skills Minister and the Exchequer Secretary to the Treasury have recently conducted a series of roundtables with stakeholders to understand how the reforms are working in practice. At the same time an in-depth study is underway to support the government understand the drivers of change in apprenticeship numbers. The BRC event in the House of Commons was an opportunity to showcase how the industry is adapting to the 2017 reforms.
This activity will inform decisions taken at Spending Review 2019 when the funding plans for apprenticeships are set. The review is a key moment for the future of apprenticeships. The BRC is working hard to ensure that the decision makers understand the value retailers place on apprenticeship training and listen to our calls for reform to improve the system.
 DfE, apprenticeship statistics, 2019
By Fionnuala Horrocks-Burns, Employment and Skills Policy Adviser at the British Retail Consortium.
We are now recruiting onto the BRC Retail Leaders Apprenticeships. This is an opportunity for retailers to enrol a small number of employees onto the course, before committing to running a closed group for your business. Find out more at firstname.lastname@example.org or Tel: 020 7854 8921.
For more information on our apprenticeships click here.