Thatcham Research has called on 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 industry association, which explores risks and opportunities involved around vehicles and their technologies, states that 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.
With new technologies, including electrified powertrains and ADAS, continuing to develop in the new-car market, the industry needs to ensure that it has the skills available to it for maintaining and servicing these vehicles. If not, there is a risk that drivers will be unable to ensure their vehicle safety, while the aftermarket will falter.
“The automotive sector is facing a perfect storm of rapid technological change, a reduction in upskilling and recruitment, and an ageing workforce,” commented Jonathan Hewett, Chief Executive at Thatcham Research. “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.”
As highlighted in Thatcham Research’s Impact of BEV Adoption on the Repair and Insurance Sectors report last June, approximately 16% of UK technicians have the relevant qualifications to work on electric vehicles (EVs). The Institute of the Motor Industry also predicted that by 2030 there will be a shortfall of 35,700 qualified technicians.
Apprenticeship levy cap not suitable
While Thatcham Research has sought to address this shortage through the provision of training programmes such as EV Ready, the UK remains at risk of missing Net Zero targets which rely on new repair skills to ensure the sustainable adoption of EVs.
There are also concerns about rising insurance costs and the emergence of unrepairable vehicles, should the skills crisis continue.
A backdrop of increasing vehicle complexity driven by the Automated, Connected and Electric (ACE) agenda is exacerbating the skills crisis, in addition to the widespread fitment of recently mandated ADAS to new vehicles. Earlier this year, the ABI highlighted the average price paid for motor insurance rose by 25% over 2023.
To support urgent changes to the apprenticeship levy cap, Thatcham Research invites trainers, garages, bodyshops and others within the repair chain to sign a petition calling for Skills England and IfATE to review the 2019 cap.
The association is calling for:
- An immediate 20% increase to the 2019 Apprenticeship Levy cap. For vehicle damage apprenticeships (including paint and panel technicians, and mechanical, electrical and trim (MET) technician) it would increase from £15,000 to a minimum of £18,000 per apprentice
- Future apprenticeship funding to remain in-line with inflation via periodic levy review
Businesses and individuals can sign the petition calling for an increase in the Apprenticeship Levy cap here: https://www.change.org/thatcham-research-skills-england-apprenticeship-levy-petition
Challenging perceptions
“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,” Hewett continued.
“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 automotive repair supply chain to sign our petition and show their support for change to the apprenticeship levy.
“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. This includes the sector coming together to change perceptions around working in repair and position a career in the industry as a rewarding, progressive and dynamic opportunity.
“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.
