In recent years, apprenticeships have increasingly emerged as an aspirational programme instead of the “good choice for other people’s children” as they were often seen in the past.
Much of that shift in attitude has come in line with the introduction of the Apprenticeship Levy back in 2017, which, six years on, has sparked an important debate among policymakers and higher education institutions about how we improve take-up, particularly among those learners who could benefit most.
David Kernohan’s recent piece analysing data on apprenticeships argues that while apprenticeships are, on the whole, a good thing, they are not a silver bullet for social mobility. Yet, the data shows a more optimistic picture, highlighting how apprenticeships are one of the critical pathways for individuals to climb the social and economic ladder.
There is growing evidence from employers, training providers and learners that the apprenticeship reforms and development of these high-quality courses have created new routes and allowed take-up that would not otherwise have happened – both from existing employees and new hires.
Inclusive and productive
Take degree apprenticeships. According to the Sutton Trust, 26 per cent of degree apprentices are from ethnic minority backgrounds, a figure which has jumped since 2015. It’s a similar story for female apprentices. Those at levels 6+ have more than doubled as a proportion of total starts since 2015, and there are now more female than male apprentices over the age of 25.
Data from my organisation—the Chartered Management Institute (CMI)—finds that 71 per cent of management apprentices come from families where neither parent went to university. We found a third of management apprentices are employed in either health and adult social care, a green skills role, and/or a STEM role, in industries that are critical to UK growth.
Our data also finds that two-thirds of level 7 CMI apprentices work in the public or not-for-profit sector – delivering vital services for a thriving economy. Only 7 per cent are employed in FTSE 350 companies. Moreover, 39 per cent of CMI management apprentices are from low socioeconomic backgrounds, compared to 36 per cent in the UK labour force as a whole and 27 per cent in higher education.
This is all the more important when we look at the dire levels of UK employer investment in high-quality training across the UK, especially given the evidence that increasing human capital accounts for around one-third of productivity growth. CMI modelling, in collaboration with UVAC, suggests that the productivity returns to apprenticeships are huge: a 300 per cent return on investment, projected to add £7 billion to the economy in total by the end of the decade for a cost of £2 billion. Degree level apprenticeships deliver particularly significant productivity gains.
Part of the problem in the UK is that employers have quite logically tended to focus on their own short-term business challenges over longer-term, structural weaknesses in the economy. Indeed, as the Productivity Institute highlighted just last week, UK companies are guilty of a “lack of long-term vision hampered by short-termism and policy churn.” This is why the apprenticeship levy system was introduced and why the system was designed with some inflexibility deliberately baked in. That is the mechanism by which the skills system is re-calibrated to incorporate longer-term as well as immediate skills needs.
Balance of trade(offs)
The current system balances social mobility, universal access, as well as quality and standards. We could have a system that more explicitly focused on social mobility as a single goal, but then it may have less widespread support and may need to dial down on quality in order to increase numbers.
These are trade-offs which are rarely acknowledged in this debate. The alternative could be to try to get the current system to do more on social mobility, including for example, through an Apprenticeships Opportunity Fund to support apprentices, building on a similar approach that sees funds directed at widening the participation of under-represented groups in more traditional university study. But anyone who suggests that there are easy ways out of the mobility-esteem-quality debate isn’t properly considering these trade-offs.
Our new paper—Apprenticeship Levy 2.0—presents options which could seek to grow the number of opportunities, not limit them. These include:
- Increasing the levy amount to increase the total funding available for work-based training. This would also be administratively straight-forward as it builds on the existing apprenticeship levy system.
- Introducing some flexibility, alongside an increase in total funding. For example, any levy incurred above 0.5 per cent of the wage bill could be available for a wider range of high-quality training, while current levels of investment as a proportion of levy-payers’ wage bill continues to support standard-based apprenticeships.
- Retaining quality and impact by ensuring training continues to have a clear link to the labour market, work-based learning, independent accreditation and assessment, and capturing outputs for individuals, employers, and the economy.
- Better balance of private and public funding, for example, the government could match employer contributions to an employee’s lifelong loan entitlement to incentivise further investment in training.
- A continued focus on driving take-up among under-represented groups through local and regional apprenticeship accelerators and a dedicated hardship fund for those most in need, for example, for help with travel costs or apprenticeship support services and to target SMEs not yet engaged with the system with HR, coaching, and system navigation support.
The future of the apprenticeship landscape calls for a continued focus on fostering this universal proposition, which has the potential to bridge the skills gap, drive productivity, and contribute to a brighter future for the entire UK workforce, particularly those from lower socio-economic backgrounds.
