New Tesco report reveals that reform to the Apprenticeship Levy could lead to an additional 8,000 new apprenticeships across the retail sector every year, with 500 at Tesco alone.

The challenges of the pandemic have affected every person, every business and every community across the UK. As the UK lays the foundations for economic recovery, Tesco recognises the important role it needs to play.

A new report for Tesco, produced by Public First, sets out the retailer’s contribution at a national level and in every constituency across the UK and allows the Company to identify the actions that will have a lasting positive impact on its customers, colleagues, and communities.

One key finding is that simple reforms to the Apprenticeship Levy could get thousands more young people into employment. Strict rules on how funds are spent mean that businesses like Tesco, are currently unable to use the Apprenticeship Levy for any broader training, short courses or to ensure we can equally offer apprenticeships across all store types.

Tesco is calling on the Government to urgently take action and increase flexibility for businesses to make better use of the Apprenticeship Levy.

Tesco is the largest private sector employer in the UK, with over 300,000 colleagues. But its reach goes far beyond that. Today’s report shows that, working across its extended supply chain and support for local economic demand, Tesco supports £53 billion for the UK economy, and nearly 1 million jobs.

Young people, and particularly those in lower-affluent areas, have been disproportionately affected by pandemic. Against this backdrop is the disappointing revelation that in the five months to January 2021, the number of apprenticeships declined 18% year on year, with 36,700 fewer places*.

Tesco’s ambition is to increase the opportunities for young people to start their careers and build valuable skills. In the UK, one in five adults has worked in a supermarket at some point in their lives. For many, it’s an important steppingstone in their career and thanks to the vital work of supermarket colleagues during the pandemic, nearly 80% of the population consider them to be “key workers”.

Tesco is proposing three reforms:

  1. Allow up to 10% of Levy funds to be used to support high quality pre-employment and pre-apprenticeship programmes.
  2. Allow funds to be spent on high-quality shorter courses.
  3. Allow 10% of Levy funds to be used to cover a portion of apprenticeship costs outside of training. This would enable smaller stores and companies to significantly expand the amount of apprenticeships they offer.

This flexibility would also allow Tesco and other retailers to offer more tailored training courses – to help more people learn retail-specific skills, such as driving. It would also enable Tesco to offer courses that develop pre-employability skills or even functional skills like English and Maths. It would also boost productivity by expanding the number of apprenticeships that smaller stores could offer.

Research shows that the more engagement young people have with businesses, through work experience or even simple conversations, this can boost lifetime earnings overall. If Tesco was able to use a small part of the Levy to fund pre-employment skills training, it estimates that it could deliver a significant increase to the 200,000 pre-employment opportunities the company has already committed to providing over the next five years.

So far, Tesco’s work with the Prince’s Trust and IGD has helped over 50,000 young people develop employability and life skills and it has committed to helping a further 45,000. In addition, Tesco has self-funded more than 900 six-month placements as part of the Government’s Kickstart programme, with an 80%+ completion rate, and the company is getting ready to welcome a further cohort of Kickstart colleagues at the end of September.

With support from Government, Tesco and other retailers could increase the number of apprentices by up to 50%, resulting in an additional 8,000 opportunities across the retail sector. Most importantly, this would support jobs growth in areas of the country that really need it.

Ken Murphy, Tesco CEO said, “This report shows that what we do as a business has an impact on everyone around us, not just our customers and colleagues, but also the local communities we operate in. It is fantastic to see the contribution of Tesco so far, but I know there is more we can do and we are absolutely ready to play our part as the UK rebuilds following the pandemic.

There is a real opportunity here to boost jobs growth, after one of the most challenging years. What we’re asking for is simply the flexibility to use the Apprenticeship Levy to its full potential and give young people the valuable skills, training and experience that will translate into better opportunities in their careers.”

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