The logistics industry is demanding urgent reform after new research revealed a significant decline in apprenticeships for under 25’s, since the rollout of the Apprenticeship Levy.

The research, from the Chartered Institute of Personnel and Development (CIPD), revealed a 41% fall in apprenticeship starts for the under 19s and a 36% decline for those aged 19-24 years old, between 2015/16 and 2022/23, further to the levy’s introduction in 2017.

In addition, the research unearthed very low apprenticeship achievements rates of 54.6%, with £620m spent on training for apprenticeships that weren’t completed for year 2021/22 alone. The report suggests this is, in part, due to so much training being rebadged and therefore not being appropriate for people’s needs.

It also revealed that 54% of organisations paying the levy admitted they had converted existing training activity into apprenticeships programmes to claim back their allowance.

Responding to the report this week, the RHA said that the fall in apprenticeship starts was ”a worrying statistic”.

It pointed out that the logistics sector alone has paid over £1.1bn into the levy, as of February 2024, and it is estimated to have drawn only 20% of funds.

It criticised the length and design of some apprenticeships, pointing out that apprenticeships for key job roles such as HGV driving are difficult for candidates to take up due to the strict 12-month minimum duration and noted that the shorter bootcamps are proving more popular for both employers and learners alike.

The RHA added that the present system is restrictive, with the apprenticeship scheme failing to allow for the flexible training needs of businesses.

Richard Smith, RHA MD, commented: ”The Apprenticeship Levy is not providing value for employers and it’s failing to address the clear skills gaps that exist within our industry. For example, heavy vehicle technician apprenticeship costs have been rising but the funding is simply not keeping pace.

”Apprenticeships offer quality training, but they are not the only solution. Businesses need to be able to use their levy funds for more flexible courses for upskilling employees, whilst allowing them to focus their apprenticeship schemes on bringing young people into the workforce.

“We in the RHA have been pushing for Apprenticeship Levy reform to allow employers to utilise funds that best work for them, making it easier to upskill the workforce and improve productivity.

”We want to see a more accessible system in place as soon as practically possible so that employers can use skills funding for the training most needed within their business. This isn’t possible as things stand.

”We will continue to monitor the situation and will continue our work with training providers, the education sector, and governments across the UK to make the case for improving and reforming the present system where required.”

Logistics UK also raised concerns at the report’s findings this week. Jonathan Walker, head of infrastructure, said: ”This research reflects what we at Logistics UK have been saying for some time, that the current skills system is not fit for purpose and does not meet the needs of our sector. 

“As well as investing for the long-term through apprenticeships, employers need the flexibility to be able to provide real time, appropriate training which may not necessarily fit the apprenticeship model – once again, we are urging government to reconsider the way the system is structured to meet the needs of both employers and employees more effectively.”

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