If ministers want a real-world example of how to support skills and widen opportunity in the UK, they should look at what Royal Mail is doing.
Its £1 million apprenticeship levy transfer fund is not just a welcome initiative, it’s a practical demonstration of how a major employer can use levy funding positively to help build the workforce the UK actually needs.
By backing apprenticeships at a time where there are 1 million 16-24 year olds not in employment, education or training, Royal Mail is doing exactly what more large employers should be encouraged to do.
That matters because the politics of skills is changing. The government’s “new deal for young people” makes clear that ministers want to boost youth apprenticeships and to create more opportunities for school and college leavers to move into work through high-quality vocational routes, moving away from the outdated idea that university should always be the default route.
That shift is welcome, but talk on its own is not enough. If government is serious about creating real routes into good careers, it must make sure the funding system works where demand is growing fastest.
And this is where the current system still falls short. The debate is no longer about whether apprenticeships matter. It is about whether levy rules, incentives and delivery models are aligned with the sectors under the greatest pressure to build green capability at pace.
In automotive, that pressure is immediate and impossible to ignore. The IMI’s research shows demand for EV, battery, ADAS, sustainability and end-of-life skills is rising far faster than training capacity.
IMI TechSafe data shows there were 66,788 EV-qualified technicians in Q1 2025, but the UK will need 155,000 by 2035. Without intervention, the shortfall could hit 25,000. That is not a distant problem, it’s a live workforce risk.
Royal Mail’s model matters precisely because it points to a better way. Parliament’s own explanation of the levy confirms employers can transfer funds to businesses in their supply chain, sector or region, and government guidance allows levy-paying employers to transfer up to 50% of their annual funds. In other words, the mechanism already exists. The question is why it is still too difficult, too slow and too underused.
Government now needs to be bolder. It should simplify the levy so employers can invest where skills demand is greatest, make transfers easier to deploy, and provide stronger support for SMEs that are essential to delivery.
Crucially, it should stop allowing unused levy funds to drift back into the system untargeted and instead actively broker those funds to businesses that can use them to train the next generation.
To explore the latest workforce trends and understand the scale of the UK's skills challenge, read the IMI's latest research.
