Apprentice Guarantee will only work if employers are supported now

IMI repeats its call for two year pause on Apprentice Levy clawback

Apprentice Guarantee will only work if employers are supported now IMI repeats its call for two year pause on Apprentice Levy clawback

Steve Nash, CEO of the Institute of the Motor Industry responds to Boris Johnson’s announcement last night that 16-24 year olds should be guaranteed an apprenticeship route:

“The announcement last night from the Prime Minister is tremendously positive for the future of apprentices. We know more detail is to come later this month and in July, but we sincerely hope that the impact of COVID-19 on current and future apprentice recruitment plans is fully understood.

In the automotive retail sector, which the Institute of the Motor Industry represents, the pause button has been hit hard on apprenticeship recruitment as our on-going research has identified:

• 71% of employers stated that the likely number apprentices will fall in 2020 compared to 2019
• A drop of as much as 65% is expected in the number of apprentices recruited this year. The planned numbers are now only a third of 2019 levels.
• Only 9% said their apprentice recruitment plans will not change as a result of COVID-19.
• Training providers are also predicting a fall of on average 38% in their intake for 2020/21 compared to 2019/20.

With such a sharp drop in apprentice employment and recruitment, larger employers anticipate that their unused Levy funds will be taken back by government . And this will create a dearth of funding just as the sector will be emerging from the COVID-19 downturn.

Last month I therefore wrote to Gillian Keegan, MP, Parliamentary Under-Secretary of State for Apprenticeships & Skills requesting that the current clawback applied to unused Apprenticeship Levy funds is halted for a two year period.  I am currently awaiting a reply.

“We hope government takes heed of the fact that 71% of employer respondents to our research agree that a pause on the Apprentice Levy clawback would improve their prospects of employing apprentices. And that has to be a key factor to support the Prime Minister’s worthy ambition.”