December/January 2022

DECEMBER/JANUARY 2022 AFTERMARKET 23 Updating There also needs to be more clarity around the allocations for training and apprenticeships according to IMI CEO Steve Nash: “The Chancellor’s promises for training and development, to build a stronger economy, should be commended. The £3.8 billion investment over the course of the current parliament in training is good news for the UK as a whole. However, there was a lack of detail around how the additional £2.7 billion for apprenticeships up to 2025 will be applied. In particular we believe that there needs to be an acceleration in the updating of apprenticeship models to reflect the new innovations in automotive, which currently relies very heavily on employer input. Those employer panels would certainly benefit from some additional resources to support their important work. Without this, the government’s own ambitions in Decarbonisation could be seriously undermined. “Currently the apprenticeship models are not fully aligned to the evolution of electric vehicles and other new and rapidly evolving automotive technologies. Yet the pace of growth in sales of EVs in particular has increased enormously in the last 12 months. Without a properly qualified workforce, the EV revolution – which is fundamental to the government’s Decarbonisation plan - could stall.” Steve added: “As important as it is to grow the pipeline of new talent through apprenticeships, we would also like to have seen some more funds directed towards helping the existing workforce gain new skills to deal with electric vehicles in particular, to avoid an impending skills gap that we have already identified.” Resource Staying with apprenticeships, NFDA Chief Executive Sue Robinson pointed out some areas where changes still need to be made on access to funding: “Apprentices are an essential resource for the automotive industry, one that continuously invests to create opportunities for the workforce of the future and upskill current staff. It is encouraging to see that the government is committed to supporting the development of apprenticeships in response to the demand for new skills. However, we are disappointed that the government has not considered our recommendation to extend the window in which employers can use unspent Levy funds by 18 months.” Fundamental change SMMT Chief Executive Mike Hawes welcomed the measures to support businesses, such as the aforementioned changes to Business Rates, but believed this could have gone further, particularly in the context of the ongoing disruption caused by COVID-19: “The effects of the pandemic continue to hurt businesses across the sector; Supply chain disruption, skills shortages and punitive energy costs. The Budget included some significant steps, most notably in adjusting Business Rates to allow relief on renewable energy and the extension of the super- deduction. Together with the Global Britain Investment Fund which provides £817m to support the transition of automotive manufacturing and the £620m announced last week for incentives, as well as investment in charging infrastructure, these are a recognition of the importance of the automotive sector and its ability to drive innovation and exports, and to create well-paid, highly skilled, green jobs across the country. "However, if we are to attract the investment in plant and machinery that a modern, competitive and decarbonised industry needs, a more fundamental change in Business Rates is still necessary, one that actually incentivises the continued investment that factories need to be at the cutting edge of operational efficiency. The Budget was also a missed opportunity to support the many supply chain businesses which are suffering cash flow shortages due to stoppages arising from the semiconductor shortages.” Significant Also commenting on the overall impact on the automotive sector, Philip Nothard, Chair at the Vehicle Remarketing Association, said: “This was not a Budget in which the motor industry featured heavily but there are some points of interest. The fuel duty freeze, vehicle excise duty freeze on HGVs and investment in better facilities for truck drivers, are all welcome, even if they are unlikely to have significant impacts. Really, what is more interesting is the government’s overall efforts to keep the economy on an even keel as we hopefully emerge from the pandemic. Certainly, we are in a better place than would once have been forecast but there remain a number of factors that continue to create headwinds, ranging from inflation to supply chain issues, that are now probably bigger threats to the used car and remarketing sectors. There are reasons to be relatively optimistic but it shouldn’t detract from the fact that significant problems remain and government might have to do more to help business deal with these in the near future.” Specific threats The used car market should remain buoyant according to Paul Burgess, CEO at Startline Motor Finance, which should be good news for independent garages: “There’s quite a lot of economic news in the Budget that, even looking back just a year, we would very much have welcomed in the midst of the pandemic. Growth is higher than expected, unemployment has remained relatively low, and government debt appears to be high but under control. On the other hand, there is no denying that the economy continues to suffer from the effects of COVID-19, Brexit, the semiconductor shortage and more. The impact of all of these factors is difficult to predict over time and, in addition, it seems very likely that many people will find their personal spending power noticeably reduced over the coming year and longer, especially given that inflation is expected to be higher than 4%. From a motor finance point of view, we don’t believe these represent specific threats to the current buoyancy of the used car market and expect a strong 2022, but it should definitely be noted that the road ahead for the general economy could be pretty bumpy.” The road ahead for the general economy could be pretty bumpy ” Follow us on Facebook: facebook.com/aftermarketmagazine