Review of the Apprenticeship Levy still vital, says Logistics UK

Friday 17 February 2023

Following Apprenticeship Week, which highlighted the crucial role apprentices play in the economy, Logistics UK is reiterating its call for government to review its funding model for the Apprenticeship Levy. According to the business group, the model must allow greater flexibility, and ensure funds are more accessible to businesses which are looking to resolve industry’s skills gaps.  
 

Jonas Keat, Policy Advisor at Logistics UK, comments: “The current Apprenticeship Levy does not work for any sectors. City & Guilds research demonstrates that of 1000 HR leaders, 94% reported facing at least one barrier to accessing their levy funds, with combined research between City & Guilds and the 5% Club showing that UK employers have spent an average of just 55.5% of their apprenticeship levy funding over the past five years.  Logistics UK is asking for the current format to be amended into a Training Levy which will allow more flexibility so that companies can utilise the funding available. Having originally called for this in March 2021, we have reiterated these calls within our recent Spring Budget submission as the recruitment situation still needs to be addressed. Apprenticeships have a vital role to play in the development of a skilled workforce and solving the sector’s long-term skills shortage.  

“Workers currently looking to access apprenticeships are being held back by the minimum skills requirement which dictates that people can only take up an apprenticeship if they have achieved a minimum standard of maths and English. While this might be viable in other sectors, within logistics, skills and experience are more essential in some roles – the industry is not a ‘one size fits all’ employer. Following conversations with members, Logistics UK believes this requirement is preventing a potentially valuable group of young people from joining the workforce via the apprenticeship route. 
 

“The creation of a Training Levy, to replace the existing Apprenticeship Levy, would allow companies to solve their own skills shortages in the short term by allocating levy funding for training programmes which do not necessitate a year-long apprenticeship – such as HGV driver training. The implementation of a Training Levy would support development at all ages from those without academic qualifications and new to work to those looking for a career change.  
 

As Keat continues, 99% of logistics businesses are classed as SMEs - however, apprentices aged over 18 years old who work for smaller businesses which employ fewer than 50 people, are currently ineligible for full funding. “Paired with the requirement for a 20% minimum off-the-job training, this mismatch between available candidates and roles on offer results in a lot of valuable time being wasted in certain programmes, and highlights the inflexibility of the apprenticeship system for both employers and employees in logistics.  
 

“Overall, there are still not enough apprenticeships being offered for logistics roles in general, and currently only Level 3 roles, such as mechanics, and above are eligible for funding through the National Skills Fund (NSF). We need this funding to be extended to selected Level 2 roles (such as HGV drivers and warehouse operatives) which are currently experiencing shortages. Our industry wants to see more collaboration with the government to address our recruitment needs, including continued support for our industry-led Generation Logistics campaign, and more relevant apprenticeships being offered.” 
 

Logistics UK is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.