GCSE Results Day: New Growth & Skills Levy needed urgently, as IMI reveals 18,000 automotive apprentices were lost as a result of COVID-19

Employers and Training Providers need clarity to capitalise on the 2024 GCSE cohort

As students prepare to find out the results of their GCSEs, the Institute of the Motor Industry (IMI) is hoping employers and training providers will receive clarity on the Growth & Skills Levy so that apprenticeships can be a clear career path for the 2024 post-16 cohort. For the automotive sector this is a critical issue.

New analysis from the IMI reveals COVID-19 had a devastating impact on apprenticeships across the sector. ‘The Impact of COVID-19 on UK Automotive Apprenticeships and the Road to Recovery’ shows that at the height of the pandemic, apprenticeship starts plummeted by more than half. They have not yet returned to previous levels.

Prior to the pandemic an average of 14,000 individuals started automotive apprenticeships every year in the UK. At the height of the pandemic – in 2021 – starts fell to just 6,300. Despite a steady increase since the 2021 low, 2023 saw fewer than 10,000 new apprenticeships begin.

The IMI estimates that the sector has already lost 16,700 apprenticeships as a result of the pandemic and the ongoing impact means the sector will ultimately have lost around 18,000 apprentices. Assuming current trends, it will take until 2031 to reach pre-pandemic levels and a further nine years to recoup the lost 18,000.

The sharp decrease in new apprentice numbers raises critical implications for the automotive sector’s future sustainability and competitiveness. In particular, the shortfall risks exacerbating the existing skills gap – currently at 20,000 vacancies – because the pipeline is not being built to fill roles as older employees retire and skilled workers migrate to other industries.

“We feel exceptionally hopeful that the new Growth & Skills Levy will provide the right funding model for employers to use apprenticeships to upskill their business”, said Kevin Finn, Executive Chair of the IMI. “However, we are concerned that this might not be in time for this year’s GCSE cohort.”

The IMI report details how fostering flexible apprenticeship structures, capitalising on a diverse age spectrum, ensuring regional inclusivity, and fortifying supply chains will help address the profound implications of the apprenticeship shortfall in the automotive sector. It is hoped that the new Growth & Skills Levy will give businesses the flexibility they need to spend their levy funds to deliver apprenticeship programmes as well as access modular training to equip existing staff with future-proofed skills.

Other IMI recommendations include:

• Industry Collaboration to actively promote the benefits of a career in the industry.
• Flexible Apprenticeship Structures that blend traditional hands-on training with digital platforms to provide more resilience against future disruptions.
• Promotion of Higher-Level Apprenticeships to tap into a more diverse talent pool, addressing the skills gap more comprehensively.
• Robust Supply Chain Management to provide more resilience and open more avenues for apprenticeships in varied segments of the production process.
• Engaging an Older Workforce to bridge the immediate skills gap.
• Promoting Regional Balance to ensure talent cultivation is spread more evenly across the UK.

“As the automotive sector stands on the precipice of transformative technologies and sustainable mobility solutions, injecting new energy into the apprenticeship model is not just a recovery strategy for the sector”, concluded Kevin Finn. “It is also a critical pathway to attract the next generation of young people into what is arguably one of the most exciting and fast-moving sectors in the UK economy.”

Download the full IMI report: https://tide.theimi.org.uk/sites/default/files/2024-05/Post%20covid%20apprentice.pdf