Skills for transport manufacturing

Manufacturing of motor vehicles, buses, aeroplanes, trains, and ships has deep roots in the UK, supported by rich ecosystems of associated businesses and supply chains. Transport manufacturing provides high quality, well-paid work which sustains many communities across the country and makes a significant contribution to the UK economy as well as to its transport services. (Conclusion, Paragraph 21)

The Government’s legislation on the provision of bus and rail services, and policies promoting transition to EVs and fuel innovation in aerospace, provide once-in-a-generation opportunities for production and employment. Delivering on these opportunities will require the Department of Transport to mobilise the essential contributions of other Government departments and to capitalise on the Government’s industrial strategy. The UK has the talent to develop and deliver what is needed for the internal market and for export abroad, but the Government must be intentional about nurturing, supporting and further cultivating that talent, not least to meet the rising challenges of transitioning to cleaner technologies. (Conclusion, Paragraph 22)

The Secretary of State for Transport should meet regularly with her counterparts in the Departments for Business and Trade, Education and Skills, Work and Pensions, Energy Security and Net Zero, and the Cabinet Office with a focus on how the British transport manufacturing sector can be best placed to make the most of the opportunities presented by the Government’s legislation and policies on buses, rail and decarbonisation of transport, and on the Advanced Manufacturing Sector Plan. Where regional mayors exist, they should also be engaged. Both domestic procurement and global export opportunities should be on the agenda. We urge the Government to bring forward its response to the consultation on public procurement speedily and to go as far as possible towards supporting public procurement from British manufacturers. (Recommendation, Paragraph 23) 32 Apprenticeships: fit for the future?

Substantial amounts of levy funding has expired unspent. Rather than further constraining the opportunities for spending such funding, the Government should increase flexibility. We welcome the Government’s Budget 2025 commitment to fully fund apprenticeships for eligible people under 25 at small and medium-sized enterprises (SMEs). However, more should be done to better ensure that levy funds reach SMEs and supply chain manufacturers in the transport manufacturing sector. The current restriction that levy funding can only be directly spent by manufacturers who operate across the UK on their operations in England is throttling opportunities for transport manufacturers which operate UK-wide to directly invest that funding in skills across their wider workforce. (Conclusion, Paragraph 34)

The Government should: • extend the expiry window for unspent levy funding to three years; • consult on allowing levy funding to be used on capital expenditure to support the provision of training and skills development (so long as that is not to the detriment of passing down that levy funding for the benefit of small and medium-sized enterprises in the supply chain); • set out options for mechanisms for larger companies to use or pass down levy funding for the benefit of the small and medium-sized enterprises in their supply chains; and • consult on permitting levy funding to be directly spent anywhere in the UK by manufacturers with operations in other UK nations as well as England. (Recommendation, Paragraph 35 )

We acknowledge that the Government is seeking to re-balance funding to prioritise people aged below 22. However, the removal of Government funding for level 7 apprenticeships for those aged 22 and older risks jeopardising the supply of experienced and highly skilled workers for the transport manufacturing sector. (Conclusion, Paragraph 41)

We concur with the Education Committee in its report on Further Education and Skills that the Government should re-introduce levy funding for level 7 apprenticeships for all ages within the eight growth- driving sectors identified in the Government’s Modern Industrial Strategy. (Recommendation, Paragraph 42) 33

Apprenticeship standards and other technical education training standards are not consistently being kept up to date and sometimes contain significant gaps or irrelevant content. As a result, the skills provided do not always meet the requirements of employers in the transport manufacturing sector. (Conclusion, Paragraph 48)

Skills England should ensure that, notwithstanding the recent change to remove the requirement to undertake reviews at fixed points, apprenticeship and other technical education training standards are revised and updated at a minimum of every three years. It is essential that transport manufacturers are closely involved in these reviews, to ensure that technological changes, current skills shortages and requirements specific to certain transport sectors are reflected in the standards. (Recommendation, Paragraph 49) Attracting, developing, and retaining a diverse workforce

The UK does not have a sufficient pipeline from education to industry. Re- skilling and upskilling are also not adequately supported to better enable people to be retained by existing businesses or move from one business or sector to another. (Conclusion, Paragraph 64)

The Department for Transport should on at least an annual basis gather information from British transport manufacturers on how effectively the UK’s vocational training system is delivering a robust pipeline of skills, and report these findings to the Departments for Education and Work and Pensions to inform further development of vocational training pathways. (Recommendation, Paragraph 65)

Skilled workers face significant barriers when trying to move across and within areas of transport manufacturing. This is especially frustrating when employers report persistent skills shortages. Skills England should by the end of 2026 consult the transport manufacturing sector on the potential benefits of a ‘competency passport’ approach to improving the ease with which workers can transfer between, and within, all areas of the sector. (Recommendation, Paragraph 66)

There is a significant and complex challenge to be overcome in increasing diversity in the transport manufacturing sector. We welcome the Department for Transport’s commitment to work with industry to change outdated perceptions of manufacturing and strongly endorse the Government’s target to increase women’s representation in the advanced manufacturing sector to 35 per cent of the workforce by 2035. (Conclusion, Paragraph 72) 34

Skills England should by the end of 2026 set out an evidence-led plan, commissioning research necessary to fill gaps in knowledge on what has worked best in the manufacturing sector, detailing how it will support the Government’s target to increase diversity in the manufacturing sectors. The plan should include commitments to: • assess the long-term effectiveness of manufacturing sector engagement activities with young people; • independently assess the outcomes of manufacturing sector recruitment campaigns; and • monitor bespoke adjustments made by manufacturers designed to increase diversity of entrants, such as introducing inclusive workwear for women. Skills England should also support small and medium-sized enterprises by providing shared toolkits to help them adopt best practice measures for increasing diversity. We ask that the Department for Transport report to our Committee at least every six months on progress towards achieving this diversity target in transport manufacturing specifically. (Recommendation, Paragraph 73)

The Department for Transport should work with relevant government departments to strengthen accountability for careers advice and subject choices guidance in schools to ensure that pathways to careers in manufacturing are not disadvantaged. (Recommendation, Paragraph 74)

Skills England must undertake a review to ensure that it supports a range of modular or part-time apprenticeships, or other training options in the transport manufacturing sector, to help attract candidates with caring responsibilities or those returning to work from career breaks. Manufacturers receiving levy funding or apprenticeship support should be required to report annually to Skills England on the uptake of those training options by candidates with caring responsibilities or those returning to work from career breaks, to ensure the support is reaching that cohort. Where uptake is low, the options should be revised, or future support should be made contingent on increased levels of uptake. The Government should also consider whether release of levy funding should be made contingent on employers’ delivery against their own diversity targets. (Recommendation, Paragraph 75) 35