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Free apprenticeships will provide much-needed boost for automotive SMEs, says IMI

The IMI said that this is a significant step for the sector, but called for Apprenticeships Levy reform for larger businesses.

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The Institute of the Motor Industry (IMI) said that the free apprenticeships for under-25s in SMEs announced in the Budget is a much-needed boost for the automotive aftermarket.

The IMI said that this is a significant step for the sector, but called for Apprenticeship Levy reform for larger businesses.

Nick Connor, CEO at the IMI, said: “The IMI is delighted that our pre-budget call for action to improve access to apprenticeships has been partly addressed in today’s Budget.

“With the introduction of free apprenticeships for under 25s in SMEs, this is a significant step for a sector where 96,000 small and medium sized businesses play such a critical role.”

The IMI has advocated with the Government regarding the difficulties faced by SMEs navigating the levy system, highlighting that the sector has experienced a 30% decline in apprenticeship starts since 2018-19.

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Connor said: “This decline has restricted the flow of new skilled workers entering our workforce, adding pressure to already tight recruitment pipelines across technical and specialist roles.

“We were also encouraged by the announcement made before the budget that the minimum Apprenticeship Pay will rise to £8 per hour from April next year.

“This undoubtedly will also help with attracting young people to apprenticeships.

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“We do, however, still need to see Levy reform for larger businesses. Our data shows that Levy utilisation in automotive is significantly lower than in other industries.

“Complex rules and inflexible structures prevent businesses from accessing funds for short, targeted courses that are vital for maintaining safety and compliance – and for the Government’s net zero ambitions.

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“We will, therefore, continue to work with the relevant departments and industry stakeholders to get this issue addressed.”

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The IMI also voiced concerns that investment in electric vehicles (EVs) focuses heavily on charging infrastructure and manufacturing, with less regard for the “critical role of the aftermarket” in giving customers the confidence to switch.

Connor added: “It is vital that specific funding is provided for the training that will be critical for the automotive workforce to transition to support net zero mobility.

“It is counter-intuitive to invest in infrastructure but not in the skills that will ensure vehicles can be maintained and repaired safely.

“Finally, we are pleased to see that the Chancellor has listened to the industry, including the IMI, and delayed any changes to the Employer Car Ownership Scheme (ECOS).

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“We will continue to represent our members’ interests in highlighting the importance of this scheme.

“As the voice of the automotive workforce, we will go back to Government with the evidence that underlines where reform will empower employers, protect consumers, and secure a future-ready workforce.

“Working in partnership with Government and Skills England, we are committed to ensuring every occupation in automotive is equipped for a safe, sustainable, and competitive future.”

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