Apprenticeships are at the centre of the government’s skills strategy. In 2016, the Post-16 Skills Plan was published, setting out the government’s vision to improve technical education provision by removing low-quality qualifications from the market, ensuring progression routes within technical education, and bridging technical and academic provision.
To fulfil this plan, we have seen some big changes to apprenticeships. Four of the 15 new technical routes will be delivered through apprenticeships, an expansion of higher and degree apprenticeships is on the cards, old frameworks will be replaced by new employer-led standards, and, exactly one year ago today, the levy came into effect for employers with a pay bill over £3 million.
Expectations were high prior to the introduction of these changes, but have they been met?
Apprenticeships have been praised internationally for smoothing the transition from school to work while equipping young people with the skills the labour market needs, so the government’s renewed focus is good news. However, there are serious doubts around whether the policy has been successful so far.
Recent data shows a 37 per cent decrease in the number of apprenticeship starts in the second quarter of 2017-18 compared to the same period last year. To compound this problem, only two-thirds of expected levy-paying companies have registered an Apprenticeship Service Account, which they need to use their levy money.
Considering the above, it may be time to draw on approaches from abroad. Today’s report Apprenticeship training in England – a cost-effective model for firms? does just this. This new research has been commissioned by JP Morgan and the German foundation Bertelsmann Stiftung, and led by the global apprenticeships expert Professor Stefan Wolter, with support from the Education Policy Institute.
The analysis looks at the benefits for employers from implementing a Swiss-style apprenticeship system. Switzerland is known for having a long tradition of reputable apprenticeship training leading to safe job opportunities and the provision of good skills, and differs from the English policy in a number of respects.
One key difference is that Swiss apprenticeship programmes are much longer – with training lasting for two or three years. Apprenticeships are also designed as upper-secondary or post-secondary routes, mainly directed at 16 and 18 year-olds – in contrast to England where 60 per cent of apprentices are 19 or older. There is also a lot more classroom-based learning than the minimum 20 per cent "off-the-job" training we have here in England. Pay also differs – Switzerland lacks a minimum wage for apprentices.
Results vary widely
The report applies this model to an assortment of English occupations that have or will have apprenticeship training. It then considers the costs of training apprentices, against the contributions made by apprentices to the employer, and the savings firms could make if they retain apprentices after training. The result? Firms in England would see net benefits from training apprentices in most sectors.
However, while there are benefits from this model, results still vary widely within and across sectors, and companies of different sizes. Taking this into account, the report puts forward a number of findings that could help ensure the government’s apprenticeship policy is successful in the long-term.
Firstly, allow for flexible arrangements and targeted support. Big companies are more likely to obtain net benefits from hiring apprentices, while smaller employers may struggle to break even. Benefits also vary across industries and regions. With employers seeking more flexibility in how and on what they can spend their levy money, a compromise may therefore be necessary between the demands of employers and the need to keep the system consistent. This also means that smaller employers should be properly supported.
Secondly, expand apprenticeships among young people and tackle dropout. The report suggests that the younger apprentices are, and the longer training is, the higher the benefits are for both employers and apprentices. This, of course, is a challenge for England, as most apprentices start later. Alongside this, to avoid making losses companies must retain a substantial number of apprentices after training. The high dropout rate of 33 per cent presently hinders this.
Lastly, a concerted focus on quality is crucial. In sectors dominated by low-skilled work, where wage returns to apprentices may be low, ensuring higher quality of training would help raise productivity, which in turn could drive up wages. To begin with, many employers may face net costs from training apprentices – yet if the training is regarded more as a long-term investment in future middle management positions, benefits can be reaped for employers further down the line.
The government still has time to ensure that its policy on apprenticeships ultimately delivers for employers, young people, and the taxpayer. Ensuring that it is receptive to ideas and models from abroad may well help it achieve this.
Gerard Dominguez-Reig is a senior researcher for post-16 and skills at the Education Policy Institute