The Institute of the Motor Industry (IMI) is confident dealer groups will be able to use all funding from their apprenticeship levy to avoid handing back unused money to the Government.
From April 6th this year, businesses with annual payroll costs of £3 million or more will pay 0.5% of their annual payroll bill, minus an allowance of £15,000, into a digital account towards the apprenticeship levy.
Dealers will have 24 months from May 2017 to use the funding.
Apprenticeships are moving from the previous ‘Frameworks’ system to a new ‘Standards’ system.
Employee led working groups or ‘trailblazers’ have to form an apprenticeship Standard and this has to be approved by a body, like the IMI, before levy funds can be used against it.
The level 3 light vehicle technician is the only Standard that has been through the approval process. The accident repair Standard is in the development stage.
There are 12 other automotive Standards that have been submitted (see below) but they still need to go through the development and approval process.
Stephen Latham, National Franchised Dealer Association (NFDA) senior operations manager, is urging dealer groups to get behind development of the new Standards and take on apprenticeships across a wide variety of job roles to avoid having a surplus of levy funds.
Latham said it is not too late for dealers to start developing a Standard if they feel it is missing from the list.
The IMI has been working with dealer groups to help them figure out how much of the levy will be taken up by manufacturer mandated training for technician apprenticeships and how much will be left in the pot after that.
Steve Nash, IMI chief executive, said: “Dealers will have two years before they will lose the funding from their levy pot. I’m confident the other standards that are in development will be ready in time before that 24 month deadline.”
The majority of manufacturer academies are expected to migrate from Frameworks to the new Standards apprenticeships from April.
Nash said developing the level 3 technician Standard took two years because it was the first one in the automotive industry.
He’s confident other Standards will all be approved by the Government and it will happen within a year, or perhaps even less time than that.
Nash said: “There has been a lot more activity around apprenticeships in the last couple of months. I think it got to the point where people have to accept that it’s happening and get on with making it work for them.
“A lot of the speed around development will comes down to the trailblazer groups that have to drive this forward.”
Upskilling the industry
According to Nash, the existing level 2 light vehicle technician Framework currently represents 85% of all apprentices in the automotive retail sector. There is currently no level 2 Standard to replace it in development.
Nash said: “I would expect most manufacturer academies to migrate to the new level 3 light vehicle technician Standard.
“Currently only a few of the premium brands like BMW and Mercedes train to Level 3. The Government would regard the upward shift to Level 3 across the sector to be a positive outcome.”
Nash said it would be down to dealers and trailblazer groups to convince the Government of a need for a Level 2 technician standard in addition to the Level 3.
The IMI is working with multiple trailblazer groups on the development of a wide variety of other standards that also cover non-technical disciplines.
Latham said dealers have been getting behind the development of other Standards after the Government rejected calls to hold off on the introduction of the apprenticeship levy until there was greater clarity around Brexit.
He said: “I think after dealers knew there wasn’t going to be a delay they stopped seeing it as an unwanted tax burden and they know they need to make the most of it in order to use the funds available to them.
“Dealers should also look at other Standards outside the automotive industry that have already been approved or are in development to see if they might be relevant to their business too.”
Latham said the approval process for Standards had been “bureaucratic and slow” but the Government realised it needed to speed up the process three months ago and since then the speed of the approval process has improved.
He said: “I don’t think the Government anticipated how many apprenticeships would be developed. This isn’t just the automotive industry. Every company across the UK is now looking at developing Standards for apprenticeships.”
Motor finance specialist apprenticeship
Adrian Dally, Finance and Leasing Association (FLA) head of motor finance, is part of the trailblazer group leading development of the Standard for the motor finance specialist apprenticeship.
He said: “We were pretty early out of the blocks with kicking off development but in our experience the process has been refreshing. The Government have been very helpful through development.
“We had 12 raised hands overnight to join the trailblazer group and that has been growing. We developed the initial outline for the Standard from our first meeting.”
The trailblazer group has worked on developing the Standard with further detail and has gone out to the industry to gain feedback. The next meeting for the trailblazer group is scheduled before the end of February and this is where the feedback from industry will be used to tweak the development of the apprenticeship.
The Standard will then be submitted for Government approval and Dally is confident they will get the green light before the end of March.
Dally said: “The apprenticeship is aimed at anyone that will be sitting down with a customer to talk about finance.”
> Dealers can check the current list of apprenticeship Standards in development here.
Motor vehicle service and maintenance technician (light vehicle) level 3
Accident repair technician
Automotive industry customer service advisor
Vehicle sales advisor
Vehicle parts operator
Motor finance specialist
Vehicle damage assessor
Vehicle damage paint technician
Vehicle damage panel technician
Automotive engine test engineer
Automotive engine test technician
Automotive glazing technician
Motorcycle technician (repair and maintenance)
Motorcycle technician (repair and maintenance)
Examples of non-automotive specific apprenticeship standards
Chartered manager (degree) level 6 approved
Retail manager approved level 4 approved
Digital marketer (level 3) approved
Digital marketer (level 6) submitted
HR advisor submitted