The economy is shifting rapidly and we need a skills system that can keep up. In the face of growing skills shortages, apprenticeships offer a vital mechanism to provide the skilled workforce we need for our economy to thrive. But it has the potential to become even more ambitious and relevant to the skills needed for the modern workplace. We should be scaling up the things that already work well and focus on embedding higher quality and broader transferable skills so that apprentices are better prepared for their sector and the changing world of work. Importantly, we need to protect apprenticeships for younger people and at lower levels. Between 2018/19 and 2022/23, the number of under-19s starting an apprenticeship fell by a fifth. In the same period, the number of people starting intermediate apprenticeships at Level 2 fell by 47% and advanced apprenticeships at Level 3 by 15%. While there has been an encouraging increase in the number of young people hearing about apprenticeships (83.5% according to the 2023 Youth Voice Census) the number of under-19s starting an apprenticeships remain low. We need to address these wider barriers to uptake to ensure that every young person can access the lower rungs of the ‘ladder of opportunity’.
Alongside apprenticeships, we also need to value the wider training programmes on offer to ensure that the product matches the purpose. Businesses, especially SMEs, struggle to navigate the various programmes on offer – a key concern that came out of our small business roundtables and our workshop exploring barriers to employer investment in skills training. With limited time and money, they will need support to ensure that they can invest in the training programme that best meets their needs.
- Place apprenticeship and skills within a wider industrial strategy
- A clear definition and metric for success - Government should define the measures of success for apprenticeships and ensure that quality is the prime driver. A November 2022 report by EDSK found that 47% of apprentices fail to complete their apprenticeships with concerns about quality being the overwhelming reason for dropping out. New measures of success should move away from numerical targets towards high quality measurements, e.g. the delivery of equality, diversity and inclusion (EDI strategies); apprenticeship completion rates; progress and destination measures; and percentage of apprentices and employers satisfied with programmes.
- Refocus the current programme and levy on young people - The term ‘apprenticeship’ cannot be all things to all people. So, the apprenticeship levy should be reformed to incentivise employers to take on young apprentices aged 18-24. As we highlight in our 2019 report, Our plan for apprenticeships, the large proportion of apprentices over the age of 25 makes England an outlier amongst OECD countries. Our report also highlights research from CVER which shows that the earning return on younger apprentices who are younger and new to the role tends to be higher than older apprentices who are existing employees. Plentiful flexible adult learning and retraining is essential as our economy adapts to the fourth industrial revolution – this should be properly funded and supported by government outside the apprenticeship programme.
- 16– 18 apprenticeship provision should be funded by the Department for Education (DfE) – Since 16–18-year-olds are still expected to take part in compulsory education or in a training offer, this should be funded by government. Employers are not expected to pay for A levels or T levels so this should also be the case for any other 16–18-year-old learners.
- Review functional skills requirements for apprenticeships – Research by AELP, supported by Edge, has found that the requirement for apprentices to pass Level 2 FSQs, despite failure to do so not necessarily reflecting deficiencies in applied skills, continues to hinder apprenticeship completion rates and will hamper government efforts to raise achievement rates from 52% to 67%. This requirement should be reassessed to consider how changes to the structure and content of FSQs could improve apprenticeship retention.
- Reinstate and develop a young apprenticeships model at age 14-16 and adopt the Scottish foundation apprenticeships model in England for those aged 16-18 to offer meaningful and engaging vocational opportunities at a younger age.
- Increase the availability and awareness of pre-apprenticeship programmes. The IFS points out that transition programmes to support entry into apprenticeships are more limited and underfunded in England compared to other European countries. These programmes could learn lessons from Foundation Apprenticeships in Scotland or the past policy of Young Apprenticeships in England designed to equip young people with the technical and transferable skills necessary to enter an apprenticeship.
- Government to provide greater support to small businesses by establishing a Government-run advice service for small businesses taking on an apprentice. Government should also reduce the administration burden, and remove the current cap on levy transfer, allowing levy-employers to transfer a greater proportion of their levy funds to other businesses. There is evidence that demand for apprenticeships has outstripped supply; data released by the DfE shows that from June 2020-June 2021, a total of 142,124 under-25s applied to just 46,984 apprenticeship positions. The Careers and Enterprise Company has identified that employer need for skilled labour is one of the major factors supporting apprenticeship take-up, but that this need is not always matched with a willingness to offer apprenticeships, which was listed as the biggest barrier to apprenticeship take-up. We need to address this disparity if we are to increase the availability of apprenticeship opportunities.
- Raise awareness of apprenticeships – We are pleased to see awareness of apprenticeships growing and the changes see since the introduction of the Baker Clause. According to the 2023 Youth Voice Census, 83.5% of young people discussed apprenticeships with their school at least once.
- Review pay for apprentices – The National Living Wage is currently £10.42 (due to rise to £11.44 in April 2024); however, we pay our apprentices as little as £5.28 (due to rise to £6.40 in April 2024). Furthermore, a 2020 report by the Low Pay Commission, highlighted concerning levels of underpayments of apprentices, specifically those aged 19 and over in their second year. Affordability is one of the top 3 reasons for 24% people withdrawing their apprenticeship applications according to UCAS. If Government’s aims are to build a strong economy and reduce the growing skills shortages, then they must attract and retain talent for apprenticeships through fair pay scales.
- Divide apprenticeships into units of training with a proportionate end point test so that apprentices can bank training and successes as they go. This will enable more flexibility to the system, allowing SMEs to use modules of apprenticeships to ‘top-up’ the skills of existing employees without losing the time and money needed for a full apprenticeship.
- Degree apprenticeships should be significantly expanded, with the application process easier to navigate and government working closely with employers to reach underrepresented groups.