The Institute of the Motor Industry (IMI) has responded to the 2021 Budget that was announced by Rishi Sunak, Chancellor of the Exchequer.
Steve Nash, IMI CEO, commented: “The difficult balancing act Rishi Sunak faces of supporting those most in need whilst starting to try to recoup some of the massive spend over the last year means that there are winners and losers in today’s Budget. For some parts of the automotive sector there will certainly be relief that the furlough scheme is being extended to the end of September.
“Our latest analysis of ONS data suggests that since the beginning of November, the proportions of those in automotive on furlough has been increasing in line with the tightening restrictions across the UK. But with the path out of lockdown starting in April, hopefully those numbers will start to reduce, and importantly redundancy doesn’t have to be the option for those employees for which there won’t be immediate work. The longer timescale certainly gives businesses time to start to build up their income again and perhaps gives some of the 16,000 plus individuals who have already been made redundant new opportunities in the sector.
“Employers may also be encouraged by the £126m funding boost offered by Government for training. It remains to be seen whether this will encourage greater employer engagement with Traineeships or in offering the required on-the-job training associated with the new T Levels.
“But most disappointing is the lack of any real tangible support to improve apprenticeship take up. With the Government still refusing to waive the Apprenticeship Levy clawback, if funds are not used within two years, the picture for the apprenticeship route in automotive still looks bleak. Whilst apprenticeship starts in England as a whole dropped by 9% in November 2020, for the automotive sector the fall was much more significant. Apprenticeship starts in automotive in November 2020 were 33% lower than the previous year.
“We are also deeply concerned about the impact of the fall in apprenticeship starts in key parts of our sector which play a fundamental role in keeping Britain moving. Vehicle Maintenance and Repair, Vehicle Body and Paint Operations and Vehicle Parts Operations saw declines of almost 100% in apprenticeship starts in November compared to the same period last year.
“The IMI will continue to ask Government to rethink its stance on the Apprenticeship Levy clawback. It seems utterly counter-intuitive to urge employers to take on apprentices, yet not give them the flexibility and understanding that in the last 12 months the ability to start new apprentices and therefore use the levy fund has been limited. We need all sectors to support our efforts to keep this issue front of mind with the Treasury and Department for Education.”