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News | Published January 10 2020

Changes to the apprenticeship levy could help realise future hopes for firms like A.I.M Commercial Services

As the skills gap continues to grow in a number of sectors including the logistics industry, for one industry body the message has become clear that the shortcomings of the apprenticeship levy and the lack of apprenticeships standards must be addressed for there to be any hope of solving the problem.

According to the Freight Transport Association, without apprenticeships standards against which to train new workers, the apprenticeship levy functions as little other than an additional tax on the industry.

The FTA’s Head of Skills, Sally Gilson, has previously aired concern that the skills gap in the sector will only widen without standards bring implemented.

Speaking in April 2019, Gilson said: “Despite contributing large sums to the Apprenticeship Levy fund, logistics businesses cannot draw this money down to train the workforce of tomorrow, since the standards against which to train them have yet to be approved.

“With any unused funds due to be taken by the Treasury after two years of payment, this means that the levy is simply an additional tax on those businesses which desperately need to use these moneys to train their future workforce.

“Currently, there are no standards applicable to the areas which logistics needs. This failure to provide suitable standards against which recruits can be trained essentially means that logistics businesses are being forced to pay a training ‘tax’, without having the opportunity to utilise any of this money to develop their workforce and fill current vacancies.”

The skills gap in logistics is a sizeable problem, particularly since youngsters are often unaware of the opportunities that the industry offers and therefore have little incentive to pursue careers in the sector. Combating this issue is something that Allison Kemp, managing director of A.I.M Commercial Services Ltd, has made her life’s work.

Her firm, established in 2004 and based in Ripley, Derbyshire, supplies services and training to the logistics sector to ensure vehicle operators remain compliant. A key part of the business’ work is to collaborate with schools and students to inspire young people to consider a career in the transport and logistics industry.

Speaking to The Parliamentary Review, Kemp said: “We need to inspire the next generation and widen the horizons of younger people by showing them the breadth and scope of the careers that the logistics industry has to offer. 

“Legislation could perhaps be utilised to encourage and support licence acquisition for youngsters to help them start a career in the industry. Too many people are unaware of our sector, which is essential across so many aspects of our lives.

“Increased initiatives, involving working with schools, colleges and universities, are needed to give students ideas and inspire the next generation to progress and push forward in developing new technologies to benefit the sector.”

In 2018, Kemp became the first woman to sit as deputy chair on the Freight Transport Association National Council, and her FTA associate Gilson believes that the changes in legislation that Kemp alludes to, could come about in the form of amendments to the apprenticeship levy and the introduction of apprenticeship standards.

Gilson said: “A workable apprenticeship standard and training framework would help raise awareness of the sector, developing existing employees and attracting new ones. Alternatively, the role of the apprenticeship levy should be reassessed, to make it a training levy, which would enable its use where it is most urgently needed – at the sharp end of Britain’s logistics sector.

“The main concern, is that by insisting that businesses plough funding into a levy which they cannot access instead of allowing the use of these funds for additional training, the government is preventing the development of existing workers in the logistics sector.”

This, in Gilson’s view, is having an impact on a sector that is already bearing the burden of financial pressures, and she went on to call for an overhaul of the levy for the good of the industry’s future.

Gilson said: “In essence, this means businesses will have to pay twice to train staff, thus removing valuable investment from the bottom line at a time when the logistics industry is under extreme financial pressure.

“The apprenticeship levy is not working for logistics businesses nationwide, and needs to be radically overhauled if the workforce of tomorrow is to be trained effectively.”

With the new points-based immigration system proposed by Boris Johnson’s Conservatives also set to enter force in 2021, the need for the skills gap to be addressed domestically will only become greater due to the impending restrictions on recruiting EU workers.

It is equally well-documented that the apprenticeship levy in its current form is unsustainable, meaning that changes in some form should be forthcoming. The Conservative election manifesto for the December 2019 general election pledged to “look at how we can improve the working of the apprenticeship levy” but stopped short on going into detail as to how.

When questioned on this in November 2019 by FE Week reporter, Billy Camden, the education secretary Gavin Williamson said that the relevant discussions “will happen around the spending review” to come in 2020.

Williamson said at the time: “If you look at the way we’re doing the national skills fund, investing £3 billion over a five-year period, you can see how seriously we’re taking the issue of skills and training.

“In terms of apprenticeships, they are an absolutely critical part of this. In the manifesto we have outlined the direction of travel in terms of the value we are putting on apprenticeships, the fact we are going to be making more apprenticeships, the levy is an absolute vital part of that.

“Making sure that the levy is properly funded and that it is able to satisfy the needs of industry is critical – and we recognise that.”

Properly funding the levy is one issue, but whether wholesale reforms and the implementation of apprenticeship standards follow, which are needed to help the logistics sector, is another. Time will tell as to what the newly re-elected Conservative government’s response will be.


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Authored by

Scott Challinor
Business Editor
@theparlreview
January 10 2020

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