Logistics UK calls for urgent shake-up of 'flawed' apprenticeship levy system

The UK’s apprenticeship system needs a radical overhaul if businesses which make regular levy payments into the scheme are to be able to train new recruits using these funds, according to a new report from business group Logistics UK.

According to Logistics UK’s Skills Review, there is great interest across industry to take on apprentices however, over the past five years, only 4% of levy paying employer accounts were able to fully utilise the funds available to them.

Explained Michelle Gardner, deputy director of policy at Logistics UK: “Our latest report found that the total estimated amount of funding possible to be recovered by businesses in transport and logistics since the levy was introduced was £250m. However, during the same period, the sector paid in £825m in levy funds. This is unacceptable – especially considering the current economic climate – and highlights the urgent need to overhaul the Apprenticeship Levy, especially if industry’s long-term skills shortage is to be resolved.

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“With 68% of respondents to Logistics UK’s survey interested in taking on apprentices, it is clear the demand across industry to support growing talent is there, but the current system is fundamentally flawed. Traditionally, there have been many barriers to entry for candidates and businesses, such as minimum skills requirements and minimum duration of the apprenticeship – many of which do not apply to logistics roles – as well as restrictive business size specifications which prevent further uptake of the training scheme.

“Since 2021, Logistics UK has been highlighting to government the need for the current system to be replaced with a more flexible Training Levy to enable realistic training and development programmes for new recruits. The industry itself is working hard to fill skills gaps and introduce the next generation of workers to the sector – via initiatives such as Generation Logistics – however it is now vital that government responds accordingly to remove the barriers and ensure a continued skilled workforce is available to keep the UK economy supplied with everything it needs.”