Thatcham Research calls for Apprenticeship Levy rise to avoid ‘perfect storm’

Thatcham Research is calling for an immediate 20-per-cent increase to the 2019 Apprenticeship Levy cap to prevent a skills crisis.

Failure to do so could lead to rising insurance costs and the emergence of unrepairable vehicles, warns the automotive research institute.

And it is inviting members of the UK automotive repair chain and training providers to sign a petition calling on Skills England and the Institute for Apprenticeships and Technical Education to raise the levy, which has remained unchanged since 2019.

It said the levy, capped at £15,000 per apprentice, has not kept pace with inflation and no longer meets modern training standards.

It is demanding urgent action to meet net zero targets and to enable the sustainable adoption of new vehicle technologies on UK roads.

Thatcham Research chief executive Jonathan Hewett said: “The automotive sector is facing a perfect storm of rapid technological change, a reduction in upskilling and recruitment and an ageing workforce.

“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’.

“The new Labour Government must ensure that upskilling within the automotive sector is a priority if the UK is to realise the benefits of assisted and automated driving and achieve crucial net zero targets.”

Businesses can visit https://shorturl.at/3kRXkto sign the petition.

All businesses with a wage bill of more than £3m a year must pay 0.5 per cent of their monthly payroll as levy tax.

These contributions are used to pay for apprenticeship training.

But if funds are not used within 24 months, they are returned to the Treasury.

The Institute of the Motor Industry has forecast a shortfall of 35,700 qualified technicians by 2030.

Mr Hewett continued: “While increased funding for the next generation of skilled technicians remains vital, it must come as part of a holistic approach to addressing the skills crisis.

“Together we can ensure we have access to the funding required to fix this situation before it worsens.