BRC chairman Richard Pennycook has called for reform of the apprenticeship levy, which he said is “not working”.

Pennycook, who also chairs department store group Fenwick and online retailer The Hut, urged the Government to act on the issue by adopting a more flexible approach.

The levy was introduced a year ago, when employers with a wage bill of more than £3m were obliged to pay 0.5% of their payroll to fund the jobs scheme, which they could then access to fund their own apprenticeships.

However, Pennycook, speaking at a BRC conference on how technology is changing the retail workforce, warned that the levy was not delivering.

He said: “The apprenticeship levy ought to be a helpful way to unlock the potential of apprenticeships, but the system just isn’t working. The number of apprenticeship starts is falling.

“We need action from Government – greater flexibility as to what levy funds may be spent on, so that retailers can draw down levy funds to cover the cost of backfilling roles while apprentices are off the job.

“We also need to speed up the process to approve standards so that retailers standing ready to train their colleagues are not left waiting any longer.”

He said that implemented properly, apprenticeship schemes could help retailers upskill people as the retail employment landscape changes.