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Nearly £2bn in unspent levy funds last year as skills
shortages climb
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Special approach to levy for manufacturing sector
needed to allow levy funds to be spent on wages for new
apprentices
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Allow manufacturers to spend levy funds on capital
expenditure to support the delivering of high-quality
opportunities
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High proportion of manufacturing companies based in the
Red Wall areas of Britain – where manufacturing can create more
high-value job opportunities to help the UK level up
Britain’s manufacturers are calling today on Government to adopt
a special approach to how the manufacturing sector can spend
their companies’ left-over levy funds, currently expiring and
going to waste. They are asking to be able to spend those funds-
which amounted to nearly £2bilion last year – to pay the wages of
new apprentices, a move which would allow a significant boost to
new young recruits into the sector.
Manufacturing has already been officially recognised as a growth
sector by Government, and the sector is ideally placed to help
deliver the Prime Minister’s promise of more good jobs in those
left-behind areas of the country where he has pledged to focus
his levelling up agenda.
With a high proportion of manufacturing companies based in the
so-called Red Wall areas of Britain, manufacturing can create
more high wage, high-value job opportunities to help the UK level
up. The sector already delivers wages higher than the rest of the
economy with 2.7 million jobs countrywide. This sits alongside a
£191 billion contribution to national output with massive growth
potential and agility in the sector to expand.
In spite of last year’s pandemic, 47% of manufacturers still
managed to recruit an engineering or manufacturing apprentice,
but only 45% saying they plan to do so in this coming year. There
remains untapped potential with almost a fifth considering taking
on apprentice in the next 12 months.
Jamie Cater, Senior Policy Manager at Make UK
said:
“With a bit of flex in the levy spending arrangements,
manufacturers could do even more in terms of building the
workforce of the future. Manufacturers are telling us they are
keen to take on more apprentices to fill the skills gap which
would in turn allow businesses to grow and help level up regions.
During the pandemic manufacturers showed the amazing agility of
the sector, with many switching production lines almost overnight
to produce vital PPE products for the NHS and the sector is ripe
for further expansion.
“Currently an average four year engineering apprenticeship can
cost a business up to £120,000 to deliver yet just £27,000 of
that cost is currently claimable from levy funds. The system as
it currently stands often leaves companies struggling to pay an
apprentice, leaving their levy contribution unspent.
“Government has already recognised manufacturing as a growth
sector, so allowing businesses to recruit an increased number of
apprentices with the flexibility to support them financially by
using their excess levy funds for wages. A special targeted
approach to levy funds would go a long way to allowing
manufacturers to deliver even more high-wage, high-value job
opportunities across the UK.”
