Employers complain about a skills shortage, yet favour graduates over those trained at work
PEOPLE WHO sign up for apprenticeships in the hope of improving their pay prospects could be wasting their time, a major study into the UK's skills shortages reveals.
Pay benefits for people with level 3 (A-level equivalent) vocational qualifications are far lower than estimated by previous research used by the Government to justify its case for a massive drive to improve the nation's skills.
Often there are no cash benefits, says the report which challenges the extent of the skills crisis compared with the UK's competitors.
Also, despite constant cries from employers about a huge shortage of skilled workers, they still reward graduates in preference to those who opt for a skills training route, says the study for the Sector Skills Development Agency.
The agency is the umbrella organisation for 25 sector skills councils, charged with improving UK skills in every area of employment. The councils advise government ministers on ways of reaching ambitious training targets.
The Government has set a target of 500,000 apprenticeships by the year 2020 and is investing heavily in workplace training through programmes such as Train to Gain pound;460 million this year alone. The strategy is based on an assumption that economic benefits kick in for the nation and individual at level 3.
Andy Dickerson and Anna Vignoles, who did the research for the SSDA, say such benefits are overstated. If there was a skills shortage there would be a strong wage premium for the relatively few people who hold them. However, while some industries pay a premium for level 3, half of the country's employers do not.
Some jobs, notably construction and engineering, do pay a premium to trainees who reach level 3, but the gains are still less than they would get from having five good GCSEs. Moreover, half of all employers in the UK offer no such incentives and so "one cannot conclude that there is a national shortage of level 3 vocational skills," they say.
The researchers say the study supports the assertion by Lord Leitch, in his skills review for the Treasury, that "the skills problem is as much one of low demand relative to our competitors as it is a shortage in supply".
The evidence poses a problem for ministers, due to publish their response to Leitch next week. It sends negative messages to college leavers about how most employers view vocational qualifications. While they say they want people with job-related skills, they take graduates at all costs.
Indeed, the research shows that the expected collapse in salaries, as universities produces an excess of graduates, is not happening.
A spokesman for the SSDA admitted the report gave cause for concern.
Mick Fletcher, a researcher and consultant on skills issues, said the logic underpinning the Leitch recommendations continues to unravel. "The Government needs to be careful before using mechanisms like Train to Gain to refocus public funding on National Vocational Qualifications delivered in the workplace," he said. "There is clear evidence that gaining lower level NVQs doesn't improve wages.
"They might help people get into employment but that is no great advantage for those already employed."