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FEfocus Editorial - Runaway demand isn't proof of value

Listening to the head of the National Apprenticeship Service, it is clear that the Government's investment in skills is based on a great deal of faith in employers (page 27).

More than pound;1.3 billion is being spent on apprenticeships this year to fuel a dramatic growth in numbers. Most of the growth is an extraordinary boom in the over-25s, some of whom are likely to have been in their jobs for a long time. To keep up the momentum, providers may find they are yet again asked to take a cut in funding rate.

But asked if there was a risk that apprenticeships were recreating the problems of Train to Gain - funding courses that employers could have paid for, and supporting low-quality courses with little new learning for the employee - Mr Waugh pointed to the business sense of big companies.

He said: "It's a hell of a commitment for businesses; why would some of the biggest, best brands in the country commit to it? Things like turnover rates have really fallen; the business benefits are clear."

Mr Waugh has had board-level roles in a host of large companies, but clear business benefits are not always the best use of public money.

When the final count is in, we will most likely see a rise among 16 to 18- year-olds in apprenticeships that may be acting as a real bulwark to greater youth unemployment. (So far, the provisional data that is in the public domain suggests a 10 per cent rise in apprenticeships.) But the astonishing 234 per cent growth in joblessness among over-25s, based on the provisional figures for the first three quarters, shows where the money is really going.

The justification for the vast expenditure on the apprenticeship programme is a kind of reverse Field of Dreams: if they come, it's a good job you built it.

All of which is eerily similar to Train to Gain. That had a slow start, and was then a runaway success in terms of numbers at least. The existence of the demand meant it was taken for granted that the work being done was worthwhile.

Mr Waugh points to the higher commitment in offering apprenticeships, giving the example of a large company that hired 20 people just to manage its programme of 1,000 apprenticeships. Many companies must have a similar ratio of staff to HR, however. And the unspoken attraction of apprenticeships is that they can also provide sub-minimum wage labour, for the first year at least.

This is not to be too cynical: the benefits of apprenticeships to employers and staff have been demonstrated by researchers. But a field which benefits from a rainshower may not survive a flood: it is one thing for ministers to boast of the unprecedented growth, but that also means we may not be able to rely on the established benefits of the programme.

Mr Waugh mentioned that there is talk about aligning apprenticeships and skills more with the "business" part of the Department for Business, Innovation and Skills. This may not be a bad thing as long as a distinction is maintained between the needs of employers and those of UK business as a whole.

Identifying strategic skills shortages and market failures in training sounds like something that would have been worth doing from day one. But just because employers want public funding doesn't mean they should get it.

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