IMI urges Apprenticeship Levy clawback pause

Published:  21 May, 2020

 With 91% of larger employers in the sector being forced to change their apprentices training plans as a result of COVID-19, the IMI has written to government to ask that the usual practice of taking back unused Apprentice Levy funding be suspended until 2022. 

In a letter written to Gillian Keegan, MP, Parliamentary Under-Secretary of State for Apprenticeships & Skills this week, IMI CEO Steve Nash requested that the current clawback applied to unused Apprenticeship Levy funds is halted for a two year period. 

“The loss of the Apprenticeship Levy funding over the next five years as a consequence of the current downturn in apprentices is hugely concerning”, explained Steve. “This will have significant implications for the organisations and extensive infrastructure that supports apprentice training in our industry, bearing in mind that automotive apprenticeship delivery requires significant investment in facilities and equipment.”

The IMI is currently surveying employers to understand the effects of COVID-19 on both current apprentice employment and future apprentice recruitment plans. Among the ongoing findings it was revealed that 26% of automotive retail employers have said they are unlikely to employ any apprentices in 2020, Meanwhile 40% are currently reviewing their plans, with a view to significantly reducing or possibly abandoning apprentice recruitment for the rest of this year. Only 9% say their apprentice recruitment plans are unchanged

Steve added: “Large employers in our sector are unanimous in their view that a fixed term cessation of the Levy clawback would make a quantum difference - ideally for up to 2 years. Allowing the levy funds to accrue would, in the opinion of a forum of HR Directors representing the automotive sector’s largest retail groups, greatly assist them in justifying the continued recruitment of apprentices - given that the levy cannot be used for other purposes. The IMI has, therefore, undertaken to represent this view to Under-Secretary of State and we urgently await her response.”

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