Britain's manufacturers are calling today on Government to adopt
a sectoral rethink on how levy money can be spent to boost
essential skills in high growth industries like manufacturing and
engineering.
The manufacturing sector is ideally placed to help deliver the
Prime Minister's promise of more good jobs in those left-behind
areas of the country, with average wages 13% higher than the rest
of the economy and 2.7 million jobs already countrywide with a
£191 billion contribution to national output.
In spite of the pandemic, 47% of manufacturers still managed to
recruit an engineering or manufacturing apprentice in the last 12
months, with 57% saying they plan to do so in the next year. And
some 32% say they will recruit an apprentice over other parts of
their business, up from 20% last year.
However, the latest figures show that £1,039 million of levy
funds expired unused in the nine months from May 2020, wasting
cash which could have been spent providing vital training as the
country comes out of the Covid crisis and looks to replace
millions of job casualties. Going forward, to get the most out of
recognised high growth sectors, it is vital this this money can
be unlocked to train apprentices of all ages in the essential
skills needed by industry to create well paid jobs across the
whole of the UK.
Make UK, backed by the National Manufacturing Skills Taskforce,
today unveils a new strategy with a series of targeted
interventions which will help retain as well as recruit
apprentices in the next 18 months. The introduction of the
Apprenticeship Levy four years ago was meant to create a central
cash pot so more people could be trained from scratch or
upskilled. But with an average four year engineering
apprenticeship costing a business £40,000 to deliver and just
£27,000 of that cost claimable from levy funds, the system leaves
businesses struggling to pay to train an apprentice and money so
is being left unspent.
Releasing up to 20% of levy funds immediately to help support
wage costs is the first critical ask to boost apprenticeship
numbers. A further £500 from the levy pot should also be unlocked
to fund catch-up learning or pre-apprenticeship training.
To increase recruitment in the next 12-18 months, manufacturers
have also asked for a temporary extension to the lifetime of levy
funds from 24-36 months, and 20% of Levy funds to be spent on
capital costs to allow companies time to take on more apprentices
as economic conditions and demand picks up. And finally, a
full-scale review of the levy down to core principles and
application should be undertaken by the end of 2022.
Bhavina Bharkhada, Senior Campaigns and Skills Policy
Manager at Make UK said:
'For many manufacturers, apprenticeships are key to unlocking our
recovery, and building a strong industrial base in the UK. But
they need more flexibility to do this effectively as they
themselves are struggling to recover from the Covid crisis.
'With so many manufacturers looking to recruit an engineering or
manufacturing apprentice in the next 12 months, apprenticeships
in the UK manufacturing sector can address the yawning skills gap
we face, and aid the Government in its ambition to level up.
Backed by the National Manufacturing Skills Taskforce, this new
strategy proposes a series of targeted recommendations which can
support our high growth sector by retaining and recruiting
apprentices in the next 18 months to help kick-start the
country's recovery.'
About Make UK
Make UK, The Manufacturers' Organisation, is the representative
voice of UK manufacturing, with offices in London, Brussels,
every English region and Wales.
Collectively we represent 20,000 companies of all sizes, from
start-ups to multinationals, across engineering, manufacturing,
technology and the wider industrial sector. We directly represent
over 5,000 businesses who are members of Make UK. Everything we
do ' from providing essential business support and training to
championing manufacturing industry in the UK and the EU ' is
designed to help British manufacturers compete, innovate and
grow.
From HR and employment law, health and safety to environmental
and productivity improvement, our advice, expertise and influence
enables businesses to remain safe, compliant and future-focused.
