Committee publication · Special Report · 5 May 2026 · HC 1860

6th Special Report - Engine for growth: securing skills for transport manufacturing: Government Response

Inquiry: Skills for transport manufacturing

Summary

This is the Government's formal response to the Transport Committee's January 2026 report on skills gaps in transport manufacturing. The Government accepts several recommendations but rejects or partially accepts others, particularly declining to re-introduce Level 7 apprenticeship funding for those aged 22+, refusing to make levy funding contingent on diversity reporting, and arguing that regular ministerial coordination meetings are unnecessary given existing Industrial Strategy mechanisms.

Key findings

Government rejects mandatory three-year apprenticeship standard reviews, preferring data-led, responsive updates that can be completed in three months; commits to transport manufacturer involvement in revisions.
Declines to extend apprenticeship levy expiry window from 12 months (reduced from 24) or allow capital expenditure from levy funding, citing finite budget constraints (£3.3bn in 2026–27).
Rejects contingent levy funding based on employers' diversity reporting or caring responsibilities uptake, asserting employer autonomy in recruitment decisions.
Confirms Level 7 apprenticeship funding ended 1 January 2026 except for under-22s; launching eight apprenticeship short courses from April 2026 and new £2,000 incentive for SMEs hiring 16–24-year-old apprentices.
Commits to Skills England-led exploration of 'competency passports' for worker mobility and to 35% female representation target in advanced manufacturing by 2035 via Make UK Equality Taskforce.

Government position

Partially accepts. Government accepts principles around careers guidance, skills standards currency, worker mobility passports, and diversity targets, but rejects or significantly qualifies implementation mechanisms. Declines extended levy expiry windows, capital funding eligibility, and mandatory employer reporting on diversity uptake, citing budget constraints (notional £6.7bn in employer accounts against £3.3bn actual budget) and employer autonomy. Argues existing Industrial Strategy structures and devolved governance make new ministerial working groups unnecessary. Prioritises under-25 apprenticeships and short courses over Level 7 funding.

Tone

Procedural

Topics

skills-and-trainingmanufacturingapprenticeshipspublic-procurementdiversity-and-inclusion

Key actors

Transport Committee, Department for Work and Pensions, Department for Business and Trade, Department for Education, Skills England, Secretary of State for Transport, Careers & Enterprise Company, Make UK

Notable line

“… currently there is around £6.7 billion visible in employer accounts. This is more than double the budget so if all levy paying employers tried to spend all their notional 4 levy funds …”

Key Quotes

“… only 7% of total science graduates entered the manufacturing workforce in academic year 2021/22, 1 presenting a significant knowledge and skills deficit.”
— Government · Introduction, on scale of skills gap

“… apprenticeship starts for young people under the age of 25 have declined by 40% over the last decade across all sectors, which is likely to affect the development of the earlycareer talent pipeline across sectors.”
— Government · Introduction, on youth apprenticeship decline

“… currently there is around £6.7 billion visible in employer accounts. This is more than double the budget so if all levy paying employers tried to spend all their notional 4 levy funds …”
— Government · Recommendation 1 response, explaining budget constraints for levy extension

“We consider this targeted and responsive model to be more effective than requiring revisions at fixed intervals, as it enables action to be taken when it is genuinely needed.”
— Government · Recommendation 4 response, on apprenticeship standard review frequency

“Skills England's new accelerated approach will mean updates to apprenticeships or development of new short courses can be completed in as little as three months, ensuring the workforce is ready to deliver the major projects that will drive growth.”
— Government · Recommendation 4 response, on timeline for standard updates

“Government does not believe that imposing additional conditions on employers through reporting of training options is the right way to achieve diversity in the manufacturing workforce and there are no plans to make growth and skills levy funding contingent on this.”
— Government · Recommendation 3 response, on diversity reporting and levy conditionality

“DBT has developed a target, in consultation with industry, to increase women's representation in the sector to 35% by”
— Government · Recommendation 9 response, on diversity target in advanced manufacturing

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Source · parliament.uk record ↗