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Will the New Apprenticeship Levy Fix the HGV Driver Shortage?

For many employers, April 2017 sees the introduction of the Apprenticeship Levy, seen by many simply as a new form of corporate taxation. The levy is a 0.5% charge on the monthly pay bill, but as you get an allowance of £15,000 each year, it effectively means the levy is only payable by businesses that have an annual pay bill of more than £3 million per year. It is therefore estimated that it will be paid by only about 2% of UK employers.

This money does not go straight to the treasury, however, and is instead placed into an Apprenticeship Fund, called the digital apprenticeship service account, which the business can then draw back from to fund any company investment into Apprenticeship schemes with Government-approved training providers. Although currently, it is only businesses that are paying the levy that will have a digital apprenticeship service account, plans are in place to extend this to all employers over the next 3 years.

Why Has it Been Introduced?

The government has stated that it is “committed to boosting productivity by investing in human capital“. Warm words indeed, and as part of this, they are looking to develop the vocational skills of the UK workforce, and increasing the quantity (a target of 3 million new apprenticeships starting in England over the next 3 years) and quality of apprenticeships in the UK. The bigger picture concept is that this will, in turn, lead to a better overall productivity for businesses.

The Apprenticeship Levy was originally announced as part of the 2015 Summer Budget.

So Is This a Solution to the UK HGV Driver Shortage?

When the Government agreed to a funding cap in 2006 for the Supply Chain and Logistics LGV Standard – this opened the door for companies to bring new and younger drivers into the industry. This also included allowing the logistics sector to include licence acquisition training within the funding allocation for the Trailblazer LGV Driver Apprenticeship. This comes off the back of considerable lobbying from the logistics sector, following an initial lack of clarity from the Government on its plans for the sector.

Colin Snape from the Road Haulage Association (RHA) commented that “….the LGV Driver Trailblazer scheme allows a government funding contribution of up to £4,900 per apprentice and includes the acquisition of an LGV licence and full driver CPC qualification.

What is needed now is some Government approved training providers to take up the challenge and develop the necessary training to be approved and available via the digital apprenticeship service.

So is this the answer to the UK driver shortage? ……Surely too early to tell but we think it has to been seen as a step in the right direction.

About Silver Arrow

Silver Arrow is a specialist recruitment agency that focuses on the recruitment and placement of temporary and permanent drivers of all classes.


Rob McNinch

Commercial Director

Silver Arrow Recruitment.

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