When the Levy brakes: Apprenticeship funding to be hit by recruitment fall?

Published:  06 August, 2020

COVID-19 caused a 75% drop in overall apprentice recruitment across the automotive in June sector with take up in garages and dealerships seeing an even steeper 87% fall, and the IMI has warned this could mean that millions of pounds of Apprentice Levy funding disappears unused back into government coffers.

Data from the Department for Education shows the automotive sector has been harder hit than any other industry when it comes to apprenticeship recruitment. Overall, apprenticeship starts in June 2020 fell by 57%, compared to the same time period in 2019.

Responding to the figures, IMI CEO Steve Nash said: “While 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. 

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

Steve continued: “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 MPs 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.”

Steve added: “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.”

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