The Treasury has to act quickly to release some of the £83m the logistics industry has paid in the Apprentice Levy between April 2017 and March 2018 to help fill the skills gap as the UK heads for Brexit on March 29, says FTA head of skills Sally Gilson.
The levy requires all employers with annual pay bills in excess of £3m to pay 0.5% of their wage bill as an additional tax to the Treasury. Employers can then claim back the cost of employing eligible apprentices from the levy pot but the problem for the logistics sector has been in finding suitable apprenticeships that really meet the needs of businesses. As a result, the logistics sector has claimed back less than 10% of the £130m it has paid in since the levy was created.
The FTA has been meeting with the Treasury to find ways of releasing this much-needed money to fund the training the industry needs to address its chronic skills shortages, especially in warehouse staff and HGV drivers.
Because the standard 12 month apprenticeship is not suited to training these two vital groups of workers, the FTA is proposing that the rules be relaxed to allow employers to claim money to fund shorter training courses that would not qualify as apprenticeships, and to help smaller employers cover the wages of apprentices while they are undertaking the off-the job training that must make up 20% of their scheme.
Another mechanism the Treasury could use to free up some of the levy pot would be emergency Brexit funding to assist employers overcome the skills shortages that will be created as a result of the UK leaving the EU in March. With no clarity as yet on which categories of EU migrants will be allowed to continue working in the UK after Brexit, this uncertainty is already leading to an exodus of seasonal Eastern European workers.
It is totally unacceptable that at a time when an industry that is critical to the success of the UK post-Brexit is facing crippling skills shortages it is unable to access money which has been paid in the Apprenticeship Levy. A way has to be found to break the log jam and free this pot of money to keep Britain moving.
