Without standards, Apprenticeship Levy is simply a tax on logistics, says FTA
Monday 08 April 2019
Without suitable apprenticeships standards against which to train recruits, the apprenticeship levy is nothing more than a secondary tax on the logistics industry, according to the Freight Transport Association (FTA), the business organisation representing the logistics industry. On the second anniversary of the Apprenticeship Levy (6 April), FTA’s Head of Skills Sally Gilson is concerned that logistics businesses will not be able to fill the skills gaps, thanks to the lack of suitable apprenticeship standards against which to train recruits:
“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.”
“Gaining approval for logistics apprenticeships with the Institute for Apprenticeships and Technical Education (IfATE) has been difficult over the past two years and, 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.
As Ms Gilson continues, with skills gaps continuing to grow in key logistics roles, it is now of vital importance that the government steps in to assist an industry which is at the heart of Britain’s economy, keeping the country supplied with the goods and services it needs:
“The skills gap is very real in logistics, which often suffers from a lack of awareness among the very young people we need to attract. 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.”
As Ms Gilson continues, “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, which reduces motivation and increases staff turnover. 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.”
A recent report by the International Road Transport Union (IRU) found that the European Road Transport sector is facing “the most acute professional driver shortage in decades”, which, as Ms Gilson agrees, reiterates FTA’s worries for the future of the UK’s logistics workforce. And with the threat posed by the new Skills Based Immigration System, due for introduction in January 2021, which will place huge pressures in recruiting EU workers, this could potentially be devastating for the businesses charged with keeping Britain trading, and supporting industry nationwide.
“Logistics is a flexible, highly adaptable industry, which always goes the extra mile to deliver for its customers,” concludes Ms Gilson. “But without adequate allowances for training and development, the industry could easily come to a halt due to lack of available skilled staff. 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.”
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.