That the government’s apprenticeships programme in England is in trouble is generally accepted, even if it is not widely enough known. While the particular problem most likely to catch the government’s attention is probably funding, since the scheme as currently organised is predicted to go bust, issues surrounding the low quality and patchy regulation of the whole system are arguably even more important.
Low productivity in the UK has long been a problem, and the period since the 2008/09 crash has been particularly bad. In December, the Royal Statistical Society made the average annual increase over the past decade – just 0.3% – its statistic of the 2010s. Understood as an effect of skills shortages, this is the problem that apprenticeships were supposed to solve. That the plan isn’t working is damaging to the economy as a whole, as well as to the people and businesses that apprenticeships are designed to support.
While the scheme’s critics do not agree about everything, most agree that it was flawed from the start. The basic idea, championed by George Osborne when he was chancellor, and introduced under Theresa May in 2017, was and remains a good one: larger businesses pay a levy (effectively a tax) to fund vocational training. The charge was set at 0.5% of salary bills in excess of £3m, which meant less than 2% of employers would pay it. But in an attempt to sweeten the taste of this unpalatable new demand, while sending a Conservative “business knows best” message, ministers gave employers too much say over what would happen next. They also made some highly questionable assumptions about how businesses would respond to the financial incentives created by the scheme, which have led to a situation in which the pot is too quickly being emptied out.
There were 393,400 new apprentices in 2018/19, representing an increase of almost 18,000 on the previous year (in 2017/18, by comparison, 548,000 students started a first undergraduate degree course). Apprenticeships, which are trainee positions governed by certain rules (such as 20% off-the-job learning, and a minimum period of one year) are a crucial component of our education and employment system. Yet while many businesses and individuals are benefiting under the current arrangements, there is growing evidence of the ways in which they are not working as planned.
This includes the fact that the number of new starters has, despite last year’s rise, fallen sharply since the levy started – and is less than one-sixth of the original target of 3 million. Meanwhile the proportion of apprentices who are school-leavers – the age group with whom the term is most readily associated in people’s minds – is shockingly low: in the two years since the levy began there have been 7,100 aged under 19, compared with 80,500 adults.
Nor do the problems end when people are taken on. Investigations have found instances of apprentices in low-skilled roles who do not know they are apprentices, and employers rebadging other kinds of training as a means to access funds. Meanwhile, official flexibility over the definition of an apprentice has led to the extraordinary situation whereby £45m of funding over two years has been spent on employees studying for MBAs.
Last month a highly critical report from EDSK, a thinktank, recommended that the classification of an apprenticeship should be reviewed, along with the system’s buckling finances and regulation. Now that Gavin Williamson has been reinstalled as education secretary, these are suggestions he should urgently take up in combination with the Treasury, which has responsibility for the levy.
British politicians’ ingrained unwillingness to treat skills training as seriously as universities and schools has historically been a cause of social injustice as well as economic underperformance, and reflects badly on the nation as a whole – particularly when compared with other European nations such as Germany. If the government is serious about its “levelling up” agenda, a renewed focus on vocational training would be an excellent place to start.