Three major trade bodies and seven food retailers have called for action to reform the “broken” Apprenticeship Levy system and address the “critical and persistent” labour shortages in UK food supply chains.
In a letter sent to the government, the British Retail Consortium (BRC), the National Farmers Union (NFU) and UKHospitality (UKH), along with leading UK supermarkets, say reform to the Apprenticeship Levy would allow businesses to train up more domestic workers in order to fill the vital skills gaps, which would “foster greater resilience, support the nation’s food security, and benefit the economy.”
The food supply chain, which includes farming, handling, packaging, retailing and hospitality, has been hit by labour shortages in recent years, particularly in areas such as food production and preparation, logistics, warehouse operations and quality control since the UK left the EU and the labour market contracted during Covid. The shortages have meant labour costs have risen, creating another inflationary pressure that contributes to higher prices on shelf.
The group stated that a reformed Apprenticeship Levy could help plug shortages, but the current system is too inflexible. Businesses are required to contribute hundreds of millions of pounds into a pot, while funds can only be spent in a restrictive way. For example, businesses cannot use the money to fund any courses that are shorter than one year in duration. It is claimed that this inflexibility has cost the UK many thousands of training opportunities and billions of pounds of potential investment into the labour market at a time when it is urgently needed.
The trade bodies and food retailers are calling on the government to widen the Apprenticeship Levy into a broader Skills Levy to allow businesses to spend their funds on a wider range of high quality, accredited courses, including shorter, more targeted courses, or more tailored upskilling programmes, including food safety, hazard analysis, first aid and driving farm machinery.
The industry group noted that these changes would not cost the government any money, but by unlocking that funding, food businesses could invest millions more into equipping their workforces with the skills and training to respond to the needs of food supply chains, enhancing food security, and boosting the economy.
“Why is it that the very system that exists to enable training opportunities, serves as the total opposite?, said Helen Dickinson, Chief Executive of the BRC. “Businesses across the food supply chain have long been calling for reform to the Apprenticeship Levy. The Government should stop dragging its feet so businesses can upskill our workforce, help safeguard food security in the UK, streamline costs and respond to the needs of the economy. The Apprenticeship Levy is nothing more than a tax on business and it must be reformed.”
Tom Bradshaw, Deputy President of the National Farmers Union, said: “For a long time now there has been a clear skills gap in the food supply chain. Unlocking the money that levy payers have not been able to use would be a positive step and could help to provide much-needed flexibility in delivering apprenticeship training.
“Reforming the Apprenticeship Levy is crucial to get young people involved in farming and the wider food supply chain, as well as upskilling those already in the industry.
“We need to find better ways to support our future workforce because those people working within the food and farming sector, worth more than £128bn to the national economy, will be central to providing quality, sustainable, home-grown food for the nation in the years to come.”
Meanwhile, Ken Murphy, Chief Executive of Tesco, commented: “Reform of the apprenticeship levy could not only unlock high-quality jobs in our food supply chains, but also help safeguard Britain’s food security for the future. I would urge the government to look again at the practical barriers to skills development under the current system, because it is not delivering for food businesses or their employees.”
A spokesperson at Morrisons added: “Morrisons currently has more than 600 colleagues on an apprenticeship scheme. Even though we are one of the biggest apprenticeship providers in the country, we are still unable to spend the bulk of funds we contribute to the apprenticeship levy. Reform is needed to offer businesses more flexibility in how levy funds are used, which would unlock millions of pounds and open up additional training opportunities for people in a broader range of courses.”
NAM Implications:
- Given that food experts and practitioners in supply and retail appear to be of one mind re the Levy…
- …this leaves little excuse for further delays by the government.
- A no-brainer?
