Asda Urges Government to Reverse Apprenticeship Funding Rule Change
Asda is calling on the government to reverse a Department for Work and Pensions (DWP) rule change that defunds leadership apprenticeships for individuals aged 22 and older. The supermarket chain warns that this policy could prevent young people from advancing from entry-level positions and undermine the development of future retail leaders.
Impact on Career Progression
In 2025, Asda invested £2.7 million in apprenticeship training, expanding to 85 programmes. More than half of those who completed an apprenticeship since 2024 received a promotion, highlighting the critical role these programmes play in career advancement. The new rules, which took effect on January 1, 2026, restrict funding for leadership apprenticeships to people aged 16 to 21, including care leavers under 25. This forces companies to independently fund apprenticeships for anyone aged 22 and older, potentially stalling progression routes from the shop floor.
Levy Funding Concerns
Under the current Apprenticeship Levy rules, companies with a payroll over £3 million must set aside 0.5% of their bill for apprenticeship training, with funds expiring after 24 months. Asda has revealed it had £11.7 million in expired levy funds from last year, as businesses cannot access any unspent amounts. James Goodman, Asda chief people officer, stated, "The current funding system is holding employers back, with millions in levy funding going unused because of restrictive rules." He added that defunding leadership apprenticeships would be a backward step, cutting off proven progression routes and weakening the sector's ability to develop future leaders.
Government Response and Broader Context
The rule change was announced in Rachel Reeves' Autumn Budget, part of broader government adjustments to apprenticeship funding. Asda argues that this move contradicts efforts to support skills development and economic growth, particularly in the retail sector. The company emphasizes that apprenticeships are central to helping colleagues build essential skills and thrive in their careers. Without a reversal, Asda fears that restrictive rules will continue to waste levy funds and limit opportunities for older apprentices, impacting both individual careers and industry leadership pipelines.
