Apprenticeship funding changes coming into force in January could deter school leavers from choosing an automotive career and push the sector into an “arms race” with other high-tech industries.
In May, the Department for Education announced Level 7 apprenticeship funding would be limited to under 21s. The change is set to take place on 1st January 2026. Level 7 apprenticeships correspond with Masters Degree level qualifications as well as a Level 7 NVQ.
Commenting on the potential impact on recruitment into the sector, Emma Carrigy, Head of Research, Careers & Inclusion at the IMI said: “We are in an arms race for talent with other tech-led sectors. Whilst the removal of Level 7 apprenticeship funding from January 2026, focusing support exclusively on individuals under 21 will impact all industries, there is a risk that automotive will have difficulty when trying to recruit individuals who aspire to gain higher levels of technical expertise.”
With 2026’s school leavers set to start their final year in September, the move could affect the decisions being made by those aiming for higher tier vocational qualifications.
Carrigy continued: “The government's recent decision to withdraw funding for Level 7 is likely to have a nuanced impact on the automotive sector. The younger apprentice demographic and the limited availability of higher-level apprenticeship pathways mean historically the sector has had lower engagement with Levy-funded apprenticeships.
However, while the reform aligns with our existing focus on younger entrants, it misses the significance of emerging technologies like electric vehicles and autonomous systems.”
Carrigy added: “Alternative strategies to cultivate higher-level expertise within the automotive industry must, therefore, be prioritised as a matter of urgency.”
The full spectrum
According to Autotech Group CEO Simon King, the move could actually have unexpected benefits for overall recruitment: “The government’s decision to withdraw funding for Level 7 apprenticeships from January 2026 is a setback, particularly at a time when the need to attract and retain skilled people across the automotive industry has never been greater. However, it also presents an opportunity to refocus our attention on the full spectrum of talent development, starting at the grassroots.
“While higher-level qualifications have their place, the foundation of our industry is often built by those entering at Levels 2 and 3. By offering young people meaningful, practical experience early on, we have the chance to grow our own talent, developing the skills our sector needs from within. Through initiatives like Autotech Academy’s paid internships, we’ve seen first-hand how the right support at the start of a career can make a lasting difference.”
King added: “Now more than ever, the industry must come together to ensure that opportunities remain open and accessible to all, regardless of academic level. Building a sustainable workforce starts with recognising the value of every pathway into automotive, and creating environments where young people can thrive, contribute, and build long-term careers.”
Key role
IAAF Chief Executive Mark Field agrees that a much broader approach on recruitment is required: “The issue around bringing new people into the trade runs deeper than just funding. The industry has suffered from a perception issue for many years, but since the pandemic particularly, the entire sector has progressed, in many ways by fixing itself first. This goes hand in hand with resetting our contract with the motorist. By promoting the sector through Right to Repair we go a long way into highlighting the key role the sector plays in keeping people and businesses moving.
“The IAAF has really opened up its membership of suppliers and distributors to the trade through initiatives like Motorvate at Automechanika Birmingham as well as our own enrichment days, bringing schools and colleges into members and showing the varied careers people can enjoy in the automotive aftermarket supply chain.”
Field added: “We also have to acknowledge that as an industry we’ve come a long way from where we were.”
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