Key strategies to bridge the skills gap in the UK automotive sector 

May, 2024 - Shoosmiths LLP

On 15 May 2024 a new report, titled 'Skills 2030; Building a World-Class Skills System' was launched in Westminster. Below are our key recommendations of the report and what it could mean for the automotive sector. 

The report includes contributions from multiple industries and sector leaders including the Institute of the Motor Industry (IMI), Jisc, The University of Derby and The University of Warwick.

With the IMI reporting that vacancies in the automotive industry were sitting at around 23,000 in March 2024 (higher than in any other sector of the economy), and Policy Connect reporting in October 2023 that the skills gap is costing the UK economy around £8bn per year in lost economic output, it is clear that there is a huge amount of work to be done to get the UK workforce fit to face the challenges of the modern workplace.

The report covers five key areas under which it makes 11 key recommendations: 

  1. Reshaping skills policy decision-making
  2. Investing in the future of further education
  3. Removing barriers for young learners
  4. Maximising employer investment in skills
  5. Making lifelong learning a reality

At the report launch event the panel, comprising of some of the key commissioners of the report, were torn when asked to state which of the recommendations was the most crucial.

The following each received several votes:

Recommendation 1: The Government should develop a national skills strategy that is embedded within a wider industrial strategy. It should create a Skills and Workforce Council, a non-departmental public body at arm’s length from government, to oversee the delivery of the strategy’s goals.

Recommendation 4: The Department for Education should deliver a new Further Education Workforce Strategy.

Recommendation 5: The Government should enact a multi-pronged strategy to address the financial and educational barriers that 16-19-year-olds face when seeking to take up and complete an apprenticeship.

Recommendation 8: The Government should reform the Apprenticeship Levy. Employers should have greater flexibility to use funds for a range of high-quality training. Part of the levy should be ringfenced to promote entry-level talent in the workforce.

While not the identified as the crucial recommendation, much of the panel discussion, fuelled by questions from the audience, focused on the proposed reform of the apprenticeship levy. While the levy has recently been the subject of some reform there is clearly more to do. The levy is paid by employers with an annual pay bill of over £3m and it set at 0.5% of the total pay bill. Unfortunately, any unspent levy money is eventually absorbed into central government funds – the report quotes statistics from FE Week which predicts that the gap between levy money raised and money spent will soon reach £875million. If that money can be ring-fenced to be spent on skills training more generally, this would be a significant step forward, particularly in terms of filling vacancies within the automotive industry.

With the majority of those who will make up the workforce of 2030 already at work, it is critical that we reshape the existing talent pool as well as ensuring that those who are coming through education are provided with the right tools to succeed. The only way to address the shortages and fill the positions that the automotive sector and the broader manufacturing industry are facing is by enhancing and advancing the skills and capabilities of the existing workforce.


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