Spring Budget 2023: No apprenticeship levy reform

By Amelie Maurice-Jones

- Last updated on GMT

Spring Budget: There will be no reform to the apprenticeship levy (Getty/ SolStock)
Spring Budget: There will be no reform to the apprenticeship levy (Getty/ SolStock)

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The Chancellor did not announce a reform to the apprenticeship levy in the Spring Budget today (Wednesday 15 March), despite hospitality claiming it was “holding back investment”.

This comes after the sector called for urgent reform of the apprenticeship levy, calling it a “£3.5bn mistake”.

In a letter sent to the minister, UKHospitality (UKH), the British Retail Consortium, techUK and the Recruitment & Employment Confederation said the Government was “holding back investment” in critical training that could accelerate economic growth, hike wages and boost productivity.

The apprenticeship levy, introduced in April 2017, makes large organisations set aside 0.5% of their payroll for apprenticeships.

However, many businesses claimed they could not pay the funds - which were taken by the Treasury if not used within two years. 

The trade bodies called for the apprenticeship levy to be widened into a broader skills levy that could be spent on a broader range of accredited courses.

Despite this, the Chancellor Jeremy Hunt announced no reform to the apprenticeship levy. However, he did announce the rollout of new apprenticeships, target at over 50s, called ‘returnerships’. These will be based on existing programmes made more appealing for older workers. They will be focused on flexibility and previous experience to reduce training length

Call for help

UKH chief executive Kate Nicholls told The Guardian an overhaul of the system would help bring those who had become economically inactive, including over-50s, back into work to plug skills gaps.

She said: “Hospitality businesses are eager to invest more in developing the skills, training and development of their workforce, particularly when vacancies are so high.

“Reform of the apprenticeship levy is urgently needed to offer greater flexibility to businesses, particularly in how funding in used.”

Earlier in the month (March), the British Beer & Pub Association (BBPA) warned 2,000 pubs were at risk of closure​​ if the Budget doesn’t show a “plan for sustainable growth”.

Plan for growth

Chief executive Emma McClarkin said: “It is crucial the Government shows in this Budget it understands the pressures the sector is facing and just how much our pubs and brewers mean to communities everywhere across the UK.

“We urgently need the Chancellor to deliver a plan for sustainable growth with fair, modernised tax rates and a focus on skills and training needed to ensure pubs and breweries can thrive.”

Meanwhile, more than 155 hospitality firms signed an open letter, calling on the Chancellor to implement measures to “unshackle” the sector​​.

The letter, which was co-ordinated by UKHospitality (UKH), warned ongoing inflation and debt pressures have held the industry back from delivering economic growth and stated without action, there could be further business failures and job losses.

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