E-scooters at a crossroads
E-scooters at a crossroads

Re-engineering apprenticeships

Words by:
January 25, 2019

Last week the government launched its new apprenticeship campaign #FireItUp. But, with apprenticeship starts still lagging behind target, does the government need to refresh its strategy?

At the 2015 General Election, David Cameron’s manifesto committed to a target of three million new apprenticeship starts by April 2020. Theresa May repeated this commitment at the snap election in 2017, with the policy appearing to have firmly made its way into core Conservative Party narrative. But with only just over a year left to reach the target, and with starts still down, the government appears to have dropped the ball.

The ill-fated levy

Blame for issues to date has largely been directed towards the decision to introduce the apprenticeship levy. Whilst the notion of the levy was largely welcomed, in practice it has been criticised for being “overly bureaucratic” and overly rigid – to the extent that less than 10 per cent of income raised from the levy has been spent.

Out with the old, in with the new 

The government has also received criticism over the implementation of the new apprenticeship standards which replace the legacy system of frameworks. With the 2020 deadline to have fully-transitioned from frameworks looming, there has been criticism of the bureaucracy and delay in approving the new standards from both providers and employers alike.

Many of the ‘trailblazer’ employers who were tasked with developing the standards have yet to receive approval from the Institute for Apprenticeships (IFA), meaning they are still operating without choice under a framework system that has been deemed “redundant” and of insufficient quality by the government.

Tinkering with the faults

Seeking to fix the faults of the levy, Chancellor Philip Hammond announced a review at Conservative Party Conference in September. He pledged to “engage with business on our plans for the long-term operation of the levy”. Reports trailing the announcement hinted reforms could include enabling employers to share up to 25 per cent of their funds with businesses in their supply chain and increasing the availability of courses in STEM subjects.

The Chancellor has already committed to halving the co-investment rate for small businesses, backed-up by £240 million of funding. Hammond also laid out plans, and crucially funding, to support the IFA in identifying gaps in the training provider market and in clearing the backlog of apprenticeship standards awaiting approval.

Apprenticeship reform will also see collaboration between HM Treasury and the Department for Education, with ministers Robert Jenrick and Anne Milton working with a range of employers and providers to consider the impact of the apprenticeship levy across sectors and regions in England.

But for many, including big industry voices, the reforms aren’t likely to go far enough. Commenting on Hammond’s announcement, Dr Adam Marshall, Director General of the British Chambers of Commerce, said “the measures announced today are an important step in the right direction… but the Chancellor must introduce greater flexibility to the apprenticeship system”.

Apprenticeship renaissance?

In an attempt to reinvigorate the apprenticeship system once again, Education Secretary Damian Hinds last week launched the #FireItUp campaign. The campaign seeks to expand the apprenticeship offering to include more ‘white-collar’ jobs like accountants, actuaries and teachers. Hinds has called it a “sad truth that outdated and snobby attitudes are still putting people off apprenticeships”, and that he wants to “shift deeply held views” of apprenticeships.

Hinds has also commended apprenticeships as an alternative to university degrees, saying that three years in an apprenticeship can be just as valuable, and workers don’t end up saddled with up to £50,000 of debt. This comes at the same time as record numbers of first-class degrees were awarded last summer, an increase of more than double in a decade.

Apprenticeship reform

With reforms on the table, is it now time to iron out some of the creases in a well-intentioned, but poorly executed system?

As Hinds suggests, his vision for apprenticeships sees them becoming the norm for white-collar jobs. The challenge therefore is to adapt a system which has traditionally served industries like engineering and construction, into one that suits 83 per cent of Britain’s workforce – the service sector.

Given the areas that government have already shifted on, including reforms to the co-investment rate, there could be scope for further reform if the sector can demonstrate benefit to both the Treasury and DfE – both in terms of economic value and in enabling more people to access quality training opportunities.

The government is keen to reconnect with business following claims that Theresa May has let relationships with business groups slide. Add to this the growing pressures of Brexit and its potential impact on the UK’s productivity and workforce, it is likely that government will be looking to appease business where it can. However, this creates a risk that providers, i.e. those actually delivering apprenticeships, will not be given due consideration during this process – which will ultimately be to the detriment of the sector and of government.

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