IMI urges government to pause apprentice levy clawback as automotive industry among worst-hit sectors

Time 1 year ago

The automotive industry has been among the hardest-hit sectors for apprentice recruitment because of Covid-19, according to new data from the Department for Education.

Apprenticeship starts in June 2020 fell by 57 per cent across all sectors compared with June 2019, but automotive suffered an even sharper drop at 75 per cent, while vehicle maintenance and repair apprenticeships are believed to have suffered the most with an 87 per cent year-on-year drop.

Now the Institute of the Motor Industry is calling on the government to halt its clawback of the levy that a lot of automotive employers are still paying, so that funds can accrue to help with apprentice recruitment in better times.

The way the rules stand at the moment, any funds that haven’t been used after two years are taken back by the Department for Education, but the IMI wants that to be paused – with a further plea to employers to use the funds so they don’t lose them.

Chief executive Steve Nash said: ‘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 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.’

He said discussions were ongoing with Department for Education ministers and supported by opposition MPs, adding that the IMI hoped to see measures in the chancellor’s autumn Budget.

‘In the meantime, we are encouraging employers to use rather than lose their levy money.’

Nash added that the IMI was able to help employers understand how they could use their apprenticeship levy funds. He said it was able to support them across more than 20 of the new apprenticeship standards, including finance, supervision and retail as well as technical.

Almost all automotive businesses were open again by second half of June, says IMI

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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