The chairman of Tesco has warned that the Apprenticeship Levy is not working and urged the Chancellor to deliver a review promised in the Budget.
John Allan, who is also chairman of the housebuilder Barratt and president-elect of the CBI, said the system could be “fixed within three months” if ministers “put their mind to it”.
He spoke ahead of the launch today of a report by the business lobby London First, where he is outgoing chairman, that calls on the Government to simplify the administration of the levy and make apprenticeships more flexible to match modern working life.
Mr Allan said: “Unlike Brexit, which is difficult and complicated and not entirely in the hands of our Government, the Apprentice Levy is simple to fix.
“The Chancellor promised a review in the Budget last November. That as far as we can see has not yet happened.
“It is not working at all well. If you don’t want business to give up on this and treat it as just a tax you have got to make these simple changes. I think most business would agree with it.
“The sad thing is some businesses are giving up on apprentices altogether and just seeing it as another tax.”
He said the problems were particularly acute in London, which has roughly half the rate of apprenticeships as the rest of the country.
Introduced more than two years ago, the Apprenticeship Levy requires all but the smallest employers to pay 0.5pc of payroll into a fund to invest in jobs and training for young people. Business groups have become increasingly frustrated by the red tape around gaining approval for schemes and finding candidates.