‘Suspend apprentice levy contributions’ IMI urges Government

Virtually every day reveals some new effect of COVID-19 on everyday life and on the automotive and associated industries. The latest gloomy news comes from the Department for Education, which has focussed the spotlight on the impact of the pandemic on apprentice recruitment. And the automotive sector appears to be one of the hardest hit. Across all sectors, apprenticeship starts in June 2020 fell by 57 per cent, compared to the same time period in 2019.

However, in the automotive sector the fall was even sharper – at -75 per cent. And apprenticeships in Vehicle Maintenance and Repair appear to have been the most vulnerable to cuts with a -87 per cent drop year on year.

Steve Nash, CEO of the Institute of the Motor Industry (IMI) has responded to this latest data, saying: “Whilst it is disturbing to see such a sharp decline in apprentice recruitment, it is perhaps understandable that in the current, exceptional circumstances employers’ focus is very much on recovery. Sadly, in many cases that has meant having to realise efficiencies, including the closure of some operations and making redundancies. It is understandable that in these circumstances the focus has switched away from future workforce development, including the recruitment of apprentices.

“Notwithstanding this, many automotive employers are still contributing to the apprentice levy, and seeing unused funds clawed back by the Government.

“On behalf of employers I have personally represented the case to Government that the levy clawback should be suspended for two years, allowing the levy funds to accumulate so that employers can refocus on apprentice recruitment once they have come through the recovery phase. Those discussions are ongoing with ministers within the Department for Education and supported by opposition MP’s and we hope to see some measures announced in this regard in the Chancellor’s Autumn Statement.

“In the meantime we are encouraging employers to use rather than lose their levy money, making full use of the additional support funding announced in the Chancellor’s emergency budget last month. As the automotive Industry’s largest dedicated awarding and end-point assessment organisation, we can now support employers across more than 20 of the new apprenticeship standards, including disciplines such as finance, supervision and, more recently, we have been approved to assess two new retail apprenticeships. “So it’s by no means just about training technical staff and in many cases apprenticeships can replace existing training that would not qualify for Government funding or the use of levy funds.”

The IMI’s team of experts are ready and willing to help employers understand how they can use their apprenticeship levy funds.