Taxpayer-funded apprenticeships should be rebooted to assist kickstart the economic system, the boss of Tesco has stated, as he hit out on the rising variety of programs for high-earners.
Ken Murphy stated the variety of folks finishing apprenticeships equal to bachelor’s and masters levels, together with MBAs, had soared by greater than 400 per cent within the eight years to 2022, from 20,000 to greater than 100,000.
Nonetheless, throughout the identical interval, lower-level coaching equal to GCSEs, usually undertaken by the younger, had plummeted by 70 per cent, from 300,000 to simply 90,000.
The grocery store boss stated the figures proved the apprenticeship’s levy was failing and serving the pursuits of extremely paid executives over younger folks simply beginning their careers.
Calling for an overhaul of the system that might assist bolster the workforce, he stated: “Any scheme that helps MBAs for managers over alternatives to kick-start careers for all has misplaced its method. This was not the aim of the levy and it’s neither truthful nor efficient. That’s the reason we have to essentially reboot the system and unleash the potential of our younger folks.”
He urged the federal government to make the levy extra versatile so corporations may use the funding for programmes that enhance the work-related expertise of younger and inexperienced workers. He additionally known as for companies to have the ability to use the cash for sector-specific coaching, from meals know-how and finance.
“We’re assured that with the correct reforms we may return the variety of apprentices to pre-levy ranges, leading to hundreds of alternatives throughout the retail sector,” he stated.
Mr Murphy’s criticisms comply with an ongoing investigation by The Impartial that uncovered how the levy is being “gamed” to pay for masters programs, with greater than £1bn spent to subsidise these research since 2017, together with £100m used to part-fund MBAs for high-flyers.
This has led to a booming trade by which masters-level college programs are rebadged as “apprenticeships” and paid for utilizing the levy on the taxpayers’ expense.
As we speak, we are able to additional reveal that six universities concerned on this observe have admitted to receiving greater than £13 million in apprenticeship levy funding, largely prior to now two years, to subsidise round 1,000 candidates who’ve enrolled of their part-time senior management apprentice, which usually provides them two-thirds of the credit in direction of their govt MBA.
In response to Freedom of Data requests, Henley Enterprise Faculty, Teesside College and Cranfield College stated the variety of enrolments for this commonplace was 324, 244 and 239 respectively. Candidates usually get the course free of charge with the college receiving £14,000 for every applicant from their employer’s apprenticeship levy. Three different universities – the College of Portsmouth, College of Strathclyde and Loughborough College – additionally revealed over 200 begins collectively for this commonplace.
The apprenticeship levy is a cost that companies with annual payrolls over £3 million should fork out, paying 0.5 per cent of their wage invoice that they’ll use to coach apprentices, however any funding that is still unspent after two years needs to be returned to the Treasury as a tax. Authorities knowledge reveals that £300 million of the levy has been used to fund the senior management apprenticeship commonplace.
The federal government initially responded to our investigation with a pledge to crack down on the usage of taxpayers’ cash to part-fund ineligible college programs comparable to MBAs, however then backtracked, saying it was pleased with its part-funding mannequin. This was regardless of Robert Halfon, minister for expertise, apprenticeships and better schooling, having beforehand described the usage of the apprenticeship levy to pay for MBAs as “gaming the system”.
Use of the levy to part-fund MBAs has drawn stinging criticism from former Tory schooling secretary Gavin Williamson, former Labour schooling secretary Alan Johnson, former kids’s commissioner for England Anne Longfield, London mayor Sadiq Khan, Ofsted chief Amanda Spielman, Lush CEO Mark Constantine, in addition to from assume tanks and trade representatives who’ve known as for pressing reform of the system.
Mr Murphy added that an enormous alternative was being missed, with tons of of thousands and thousands of kilos value of unused levy funds handed again to the federal government in recent times as a tax due to the autumn in low-level coaching intakes, together with £600 million in 2021.
“That’s sufficient to fund 60,000 apprenticeships. That’s 60,000 lives that may very well be essentially improved in communities throughout the UK,” he stated.
A Division for Training spokesperson stated: “It’s incorrect to recommend an increase in degree-level apprenticeships is taking alternatives from youthful staff. Seventy per cent of individuals beginning an apprenticeship accomplish that at a lower-level and under-25s make up greater than 50 per cent of all begins. Hundreds of employers, together with Amazon and Asda, make good use of their levy funds to create tons of of apprenticeship alternatives and final yr 99.6 per cent of the apprenticeship price range was spent.”
Authorities figures present that £2 billion of the levy was returned to the Treasury prior to now 5 years and that there are 100,000 fewer underneath 25s beginning apprenticeships immediately than earlier than the levy was launched in 2017.