Spring statement 2025: what are the challenges for the Accident Repair Sector?
As the dawn of the new Spring Budget looms, significant changes aimed at balancing the UK’s public finances bring with them adjustments to tax thresholds and contributions. In an industry that has already faced threats what impacts will this have on the automotive repair sector? Brian Lennon explains the threats and what Castle are doing to mediate them.
Spring Statement (some of the key points)
On March 9th, Chancellor Rachel Reeves outlined plans for the UK economy during her Spring Statement in the House of Commons. With it, a range of tax changes are coming into effect in the next couple of weeks that will directly affect businesses like Castle Coachworks and business owners. To mention just a few:
- The Employer’s NIC increase to 15% from April 2025
- A drop in the threshold from when NICs become payable
- An increase in the National Living Wage from April 2025
Business threats for the accident repair sector
In an industry that has already has faced its own challenges, what can be done to mediate and foster continual growth? Castle are choosing to tackle the problems head on. Business Development Director, Brian Lennon explains how.
Shortage of skilled labour
“Retaining and attracting talent remains crucial for any ambitious business. At Castle, we have always benefitted from a highly loyal workforce. Reinvesting in the continual training and upskilling of our staff has helped us secure our manufacturer-approved status with leading brands and ensures the continual personal development of our staff. Skilling them up to meet the demands of future vehicles in particular the EV sector also helps ensure their future employability. Like other sectors, there is still a threat of losing valuable employees to other industries. In circumstances where salary increases may be under pressure, we are looking for ways to help keep them further incentivised.
There has also been a noted drop in the number of new talent emerging to replace jobs within the workshop. Panel beating is one such area. In a bid to help foster the repairers of the future and fill this gap, we offer a number of paid apprenticeships each year. Working alongside Northampton College to offer work-based training for vehicle refinishing technicians and METs., We have also sought out avenues to find the correct training to guide a panel technician trainee through a three-year programme.”
Inflation and rising costs of insurance
“As insurance prices have continued to rise, there has been amarked drop in the number of claims being made against accidenr repair. People simply are worried about the financial implications and knock-on effect that claiming on their insurance will have and insurers appear to be writing off cars more readily faced with increasing prices, labour rates and parts.
Where humanly possible we always try to get the best outcome for our clients when it comes to accident repair. We are always looking for ways to help mediate the impact on our customers and educate them on their consumer rights. It is your legal choice to have your car repaired at your chosen bodyshop. By reverting to us, we can help prevent you from being stung with the threat of a higher excess and through the associated total loss avoidance schemes of our approved brands, you stand a better chance of helping your vehicle be repaired rather than taken off the roads.”
Zero emissions targets
“In addition to the financial implications of the new budget, the sector are also faced with the challenges of the Zero Emissions Vehicle pathway. This has an impact on all areas of our business, from training to investing in the necessary tooling. Being already approved for Mercedes Benz, Jaguar Land Rover, Volvo Polestar, and Volkswagen Group has helped us stay up to date with their latest models of EV and hybrid vehicles as they have emerged onto the markets. We are also 1 of only 66 independent approved bodyshops for Tesla in the UK and are actively looking for ways to foster relationships with other fully electric brands like BYD and Omoda”