The government must urgently review the Apprenticeship Levy to prevent a severe shortage of logistics workers post-Brexit, according to the Freight Transport Association (FTA), the business organisation representing the logistics industry. With the anniversary of the Apprenticeship Levy fast approaching (6 April), many businesses are still unable to utilise its funding. As Sally Gilson, FTA’s Head of Skills commented, this is despite the logistics sector contributing more than £100m to the central funding pot, as well as a lack of suitable apprenticeship standards:
“The logistics industry is the lifeblood of the UK economy, employing more than 2.5m people and contributing £121bn to the nation’s GVA (gross value added). Yet it is facing a ticking time bomb: the ever-increasing shortage of skilled workers; there are currently 52,000 vacancies for HGVs drivers alone. And with the prospect of losing access to vital EU workers, the shortage could reach catastrophic levels. From HGV drivers to warehouse staff, the UK economy simply cannot operate without the logistics workforce – businesses would come grinding to a halt and Britain would cease trading.”
Since April 2017 businesses with annual payrolls of more than £3m must pay 0.5% of their wage bill to the Apprentice Levy which is effectively an additional tax. Businesses can then use their levy funds for apprenticeship training. However, vital logistics apprenticeships are either still to be approved after over two years in development or are in desperate need of amending to make them fit for purpose.
Sally Gilson continued: “It has been immensely frustrating trying to secure funded training for the logistics sector. These apprenticeships would assist in promoting logistics professions and yet, over two years in, we feel like we’re no closer to gaining the standards we desperately need across the industry. Our members would love to use their levy funds and bring young people into the sector, but this is being thwarted by the Institute for Apprenticeships. The levy also ignores the other quality vocational training that could be utilised by businesses but can’t as all their training budgets are now taken up by paying the levy. Rather than forcing employers to try and make apprenticeships work for all training needs why not recognise that there is no one size fits all and amend this to a Training Levy? Alternatively, the money could be used as an emergency fund to assist employers facing extreme skills shortages due to the government’s restriction on EU workers. Without the reallocation of funds, the UK could not cope with the loss of European workers post-Brexit.”
Efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With 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. A champion and challenger, FTA speaks to Government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.