Trade association response to spring budget

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Steve Nash, CEO of the Institute of the Motor Industry comments on the Spring Budget:

“The difficult balancing act Rishi Sunak faces of supporting those most in need whilst starting to try to recoup some of the massive spend over the last year means that there are winners and losers in the Budget. For some parts of the automotive sector there will certainly be relief that the furlough scheme is being extended to the end of September.

“Our latest analysis of ONS data suggests that since the beginning of November, the proportions of those in automotive on furlough has been increasing in line with the tightening restrictions across the UK. But with the path out of lockdown starting in April, hopefully those numbers will start to reduce, and importantly redundancy doesn’t have to be the option for those employees for which there won’t be immediate work. The longer timescale certainly gives businesses time to start to build up their income again and perhaps gives some of the 16,000 plus individuals who have already been made redundant new opportunities in the sector.

“Employers may also be encouraged by the £126m funding boost offered by Government for training. It remains to be seen whether this will encourage greater employer engagement with Traineeships or in offering the required on-the-job training associated with the new T Levels.

“But most disappointing is the lack of any real tangible support to improve apprenticeship take up. With the Government still refusing to waive the Apprenticeship Levy clawback, if funds are not used within two years, the picture for the apprenticeship route in automotive still looks bleak. Whilst apprenticeship starts in England as a whole dropped by 9% in November 2020, for the automotive sector the fall was much more significant. Apprenticeship starts in automotive in November 2020 were 33% lower than the previous year.”

The Independent Garage Association, IGA, welcomed the Chancellor’s small business support measures. Chief Executive Stuart James, commented: “We are pleased that financial support for small businesses has been extended, and thank the Chancellor for responding to our request to continue the Retail Business Rate Relief Scheme into the 2021/22 tax year.”

James continued: “There are hard times ahead for independent garages. A significant decline in MOT work is expected from April to June, where motorists took advantage of the MOT extension last year. Garages have also experienced lower volumes of servicing and repair work over the past year due to motorists making fewer journeys.

“Extending the furlough and business rate relief schemes will provide the financial assistance needed to help independent garages through this upcoming difficult period, so they can continue their essential work keeping vehicles in their local communities safe and roadworthy.”

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