2 October 2019

Automotive sector businesses that pay the Apprenticeship Levy are being urged to use their funds to upskill their own workforce, take on new apprentices, or help other organisations to do so. Under new arrangements now in place, levy-payers can share training funds with any non-levy payer including smaller businesses within their supply chain or even within their local community.

Lisa Bingley, MTI Director of Operations said, “We know that apprenticeship starts have taken a hit since the introduction of the Apprenticeship Levy which is paid by large organisations with a turnover of £3M or more. The engineering and manufacturing sector saw a 21 per cent decline in apprenticeship starts between 2017 and 2018, down from 75,000 to just 59,000 .

“It is imperative that businesses do not lose the opportunity to spend the levy on training an apprentice or upskilling their existing workforce. The levy works on the basis of ‘use it or lose it’ and if it is not spent, that money is subsumed into general taxation, meaning that the workforce will lose out on opportunities to improve their careers, and UK productivity targets will not be met.

“Earlier this year, the Government opened up the levy transfer scheme which enables levy-payers to move their training funds into the accounts of smaller organisations within their supply chain. We’re asking organisations to take a broad view on this. Any improvement in skills within their overall network is bound to benefit their business in the long run.

“The levy transfer scheme also represents a chance for businesses to make a mark in terms of corporate social responsibility. They should take a look at the organisations that are critical to their supply chain, however small a part they play, and reach out to offer some assistance. It could even be an organisation or establishment nearby that could benefit from an apprentice including businesses that their workforce depends on, such as the pub or restaurant where the team has Christmas lunch, or a local sports club or gym.

“This money is being ring-fenced by the Government to train a nation and it is a great pity that some funds are being re-directed through lack of use.

“SMEs within the automotive sector need to be particularly mindful of the funding regime when considering taking on an apprentice. Colleges and universities are only able to support a finite number through their own funding allocation. Once this has been spent, small and medium-sized businesses will need to find levy-payers to support their training, or appeal to the MTI to help them locate a partner.

“Anecdotally, we have heard levy-payers say that they aren’t familiar with the process for spending their training budget. Our skills delivery partners are levy-payers themselves, and apprenticeship training providers, so the MTI has the inside track and is in a great position to advise on the process, including showing levy-payers how to pass on their training funds to others.

“We are proud to be working with a number of levy-paying organisations including Jungheinrich UK who have made a strong commitment to investing in apprentices in forklift truck maintenance and are benefiting from ‘growing their own’ talent pool. We are keeping their teams supplied with apprentices whom they know will form the basis of their future workforce. The MTI will be responsible for at least 110 new apprenticeship starts by July 2021.

“Our ambition is for large businesses and other organisations to take their responsibilities to training seriously and make a concerted effort to ensure that skills budgets are spent appropriately. Everybody benefits from a skilled workforce and investing in training will be the key to the UK’s future success after we leave the EU.”

The MIRA Technology Institute was built with a £9.5m allocation from the Local Growth Fund, a pot of government funding awarded to the Leicester and Leicestershire Enterprise Partnership Limited (LLEP) for projects that benefit the local area and economy. The MTI is located within the MIRA Technology Park Enterprise Zone.

Formed through a partnership between industry and education the MTI offers a full spectrum of training opportunities from apprenticeships to bespoke and commercial courses for businesses from across the sector, from SMEs to global organisations. It provides access to a unique skills escalator, enabling progress to higher and degree level apprenticeships and beyond.

Coventry University has launched degree apprenticeships in product design and development and manufacturing engineering which both include full honours degree programmes and can be accessed via the MTI.

Paul Green, Associate Professor at Coventry University, said, “The degree apprenticeship scheme is a great initiative that can offer huge benefits. Industry has the opportunity to upskill staff via a structured programme that can provide competitive advantage and future growth, while apprentices can gain access to expertise that helps to ensure their skills stay relevant and up-to-date.”

The MTI is keen to hear from levy-payers within the automotive sector who have not yet used their funds and is happy to advise any business on the best way to upskill their team. Visit www.miratechnologyinstitute.co.uk, call 024 7693 5680 or email enquiries@miratechnologyinstitute.co.uk.