Government proposals to cut apprenticeship funding are a “ticking time bomb” for the sector.
The Department for Education and Skills published proposals in August that would cut state funding for some vocational training courses for 16-19 year olds by as much as 50%.
It’s feared many businesses will not be able to secure apprenticeship places at these new rates because the courses won’t be economically viable for providers to run.
Steve Nash, chief executive of the Institute of the Motor Industry, said: “The Government’s apprenticeship reforms are a ticking time bomb for our industry that’s worth £150 billion a year.
“The uncertainty around apprentice funding and provision is likely to see many employers simply not take on trainees over the next couple of years.
“Thousands of young people will miss out on an opportunity to build a career and our sector will lose vital skills and productivity.
“I’m urging education ministers to pause and learn a thing or two about what business needs before they go any further with their apprentice reforms.”
The changes, due to be confirmed in October 2016 and implemented in May 2017, come on top of the introduction of the new apprenticeship levy and the introduction of a new type of apprenticeship, which requires employers to take on the administrative burden, all of which businesses are struggling to understand.
The IMI believes the Government’s intention to cut £22bn of support for the further education sector is the main driver of the difficulties. The planned savings are inconsistent with the Government's pledge to create three million new apprenticeships by 2020.
Nash has written to the skills minister Robert Halfon - with the direct support of leading retail businesses employing thousands of people - calling for a delay in the implementation of the controversial plans.
Jane Russell, director of an award winning independent business in at Russell Automotive Centre, North London, said: “Anything that limits, reduces or stops apprentices being found, funded and taught well is like a nail in the coffin of the automotive industry.
“The Government needs to realise it can’t get this wrong.
“Having someone devise a new plan for apprenticeships in this country without any knowledge of how companies actually work is ludicrous. It’s essential the industry voice is heard.”