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'A society that truly embraces apprenticeships will revolutionise work'

The chairman of REED Recruitment writes that he had high hopes for the introduction of the apprenticeship levy, but the policy doesn't seem to be working

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The chairman of REED Recruitment writes that he had high hopes for the introduction of the apprenticeship levy, but the policy doesn't seem to be working

When I left school in 1980, TV viewers had a choice of three channels, Brian Clough had just led Nottingham Forest to a second consecutive European Cup, inflation had hit 21.8 per cent and unemployment stood at 2 million – and rising.

Fast-forward 38 years: telly addicts have unlimited choice with on-demand entertainment; Forest fans are watching their team languish in the lower realms of the Championship; inflation is under 3 per cent; and we’ve got full employment. The world has changed and few would wind back the clock (with the possible exception of Forest fans).

In 1980, my mind was focused on heading to university, an experience being shared by fewer than one in six of my peers.

In the near-four decades since then, there has been an increase in the number of universities and a large rise in the numbers attending them. This year, around one in three 18-year-olds will start a degree. But the rapid growth in student numbers is arguably not the most significant change in higher education in that period.   

The burden of student debt

I was excited about the opportunities to learn, make new friends and enhance my prospects. I didn’t consider whether the course would represent value for money. That luxury is not afforded to my children’s generation. With tuition fees at £9,250 per year and gathering interest from day one, the 18-year-olds of 2018 are rightly worried about the burden of debt.

They wrestle over whether the expense is justified by an improvement in their career progression and earnings potential. They are demanding transparency on their tuition fees. The Office for Students has announced that nearly half of students felt their degree was poor value.

I have heard several accounts from undergraduates who receive a mere four hours of contact time per week, and others who have been required to submit only one essay per term. Graduate Pok Wong is suing Anglia Ruskin University for £60,000, accusing it of falsely selling her what she has dubbed a "mickey mouse" degree.

Relative value of a degree

She claims that the qualification in international business strategy has not improved her career prospects and that students were often instructed to self-study. In that context, it’s no surprise that searching questions are being asked about the relative value of a degree against an apprenticeship or getting a job.

An apprenticeship could have been more effective for Pok by placing her into the jobs market and providing her with the skills necessary for career progression. University is not always the best option, and schools and businesses should do more to promote the alternatives.

I had high hopes for the apprenticeship levy when it was introduced in 2017. It promised a solution to the skills shortage and a way to boost pay and productivity. But a year after it launched, it doesn’t seem to be working.

Our latest jobs market data shows a 37 per cent decline in apprenticeships year-on-year, and our Youth Insight Research shows that just one in 10 young adults views apprenticeships as a chosen path to career entry.

Half of young people still perceive a university degree as their preferred route into a career, despite the concerns over value for money. There is an obvious disconnect. If the government is to reach its target of 3 million new apprenticeship starters by 2020, a rethink is needed.

'Too much red tape'

There is still too much red tape and regulation surrounding the levy. Many businesses view it as a tax on jobs. Many have experienced delays in getting the scheme off the ground. We had issues ourselves, as funding was delayed by seven months. Hopefully, as the administration catches up, more businesses will come on board. 

Low starting salaries for apprentices are also said to be putting off young people – but there is a clear argument to be made that a low starting salary is better than a large debt subject to high interest rates. We must communicate this better and attract talent.

Employers putting as much support behind these apprenticeship schemes as they do behind graduate programmes will also show that it is a valuable option and an alternative to university.  Many university degrees do not equip young people with the real-life experience that employers are looking for.

A society that embraces apprenticeships and holds them in the same esteem as a university degree will revolutionise work for young people and employers. I hope it doesn’t take the best part of another 40 years for us all to realise that.

James Reed is chairman of REED Recruitment

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