Thatcham Research is urging Skills England and the Institute for Apprenticeships and Technical Education (IfATE) to increase the Apprenticeship Levy funding cap which has remained unchanged since 2019.
The levy, capped at £15,000 per apprentice, has not kept pace with inflation and no longer meets modern training standards, resulting in a real-term reduction in training capacity.
All businesses with a wage bill of more than £3m per year must pay 0.5% of their monthly payroll as levy tax. These contributions are then used to pay for their apprenticeship training. However, if funds are not used within 24 months, they are returned to the Treasury.
Reliable and flexible access to apprenticeship funding is crucial in supporting businesses to address the skills crisis, enabling adequate provision of training opportunities for new starters.
Jonathan Hewett, Chief Executive at Thatcham Research, said, “The automotive sector is facing a perfect storm of rapid technological change, a reduction in upskilling and recruitment, and an ageing workforce. Revisions to apprenticeship levy funding must be addressed as a priority by Skills England and IfATE, unlocking funding to deliver much-needed technical training to the repair sector.”
Thatcham Research has also warned that the Automated, Connected and Electric (ACE) agenda is exacerbating the skills crisis, and is now inviting trainers, garages, bodyshops and others within the repair chain to sign a petition calling for Skills England and IfATE to review the 2019 cap.
Hewett said, “Without a robust and qualified technical workforce in our repair sector, the UK will also be at risk of increased insurance premiums and the emergence of the ‘throwaway vehicle’.
“I encourage everyone throughout the UK auto repair supply chain to sign our petition and show their support for change to the apprenticeship levy. With fairer funding we would expect to see a recovery in training capacity and a reversal of colleges closing their automotive divisions, providing the industry with much needed support to attract new talent.”
