The University Vocational Awards Council (UVAC), a not-for-profit membership organisation which aims to provide an independent voice for its members on higher and degree apprenticeships, has urged the UK government to ringfence its planned Growth and Skills Levy funding, in order to tackle the rising skills gap impacting transport and logistics firms.
The Open University’s ‘Business Barometer 2025’, a report following a survey of more than 2,000 senior decision-makers in the UK, revealed that 54% of organisations reported that they are currently facing skills shortages.
It also found that 32% of employees expect skills shortages to worsen over the next five years, while 70% claimed that economic uncertainty has made recruitment and training more difficult in the past 12 months.
Furthermore, a disconnect between the expectations of employers and the workforce of tomorrow can be seen in the data, with 71% of Gen Z respondents Z believing that employers should be responsible for providing workplace training and upskilling, while just 45% of employers believe
it’s primarily their duty to fund employee development.
Higher Education Reporting in Apprenticeships (HERA) data commissioned by UVAC has revealed that ‘businesses are more dependent than ever on funded apprenticeship programmes between levels 4-7, which have experienced a 9% increase in year-on-year starts in the last three years’.
The Growth and Skills Levy, announced by UK prime minister Sir Keir Starmer in 2024 is ‘backed by its largest ever budget of over £3 billion’ and designed to ‘provide greater flexibility to employers and learners and widen the apprenticeship offer, helping more people gain the skills they need, fuelling business innovation, and providing high-quality pathways for young people’.
A member survey conducted by UVAC also revealed that 42% of respondents feel the Growth and Skills Levy will make it harder for transport and logistics businesses to plug skills gaps.
The main reason for this, cited by 30% of respondents, is the belief that it will bring more bureaucracy and administration for employers, whilst 48% believe it will restrict higher and degree apprenticeship provision and cater for less sectors.
Dr Mandy Crawford-Lee, UVAC’s CEO, commented: “With transport and logistics firms – and the wider economy – so reliant on higher and degree apprenticeships to plug skills gaps, develop a sustainable talent pipeline or fill specialist roles, we’re urging the government to protect Growth and Skills Levy funding in this area.
“Whilst apprenticeships are not the only solution, they provide an in-work route to the professions and advanced practice careers up to and including post-graduate and master’s degree levels.
“Given that recent cuts to levy funding of Level 7 apprenticeships in January next year will also cost employers around £214 million in additional training costs, there’s no need for the government to further deepen the skills void.
According to Bridget Phillipson, secretary of state for Education, in a statement on 2 June 2025: “Skills England did not find a strong enough economic rationale to exempt a small group of Level 7 apprenticeship standards from defunding.”
Dr Crawford-Lee continued: “In addition to protecting funding, we feel the focus now should also be on defining the government’s intentions around its plans to provide greater flexibility to employers across the sector.
“It feels like businesses are in a state of limbo at the moment. The government appears to be prioritising lower-level apprenticeships designed for people not in employment, education or training (NEETs), but not providing the clarity or reassurance to those transport and logistics firms that need apprentices across all ages to meet the critical skills challenges they face.”
