Today, 6 April, marks one year since the UK government introduced its apprenticeship levy. It was billed as the single most transformative event in skills-based education for a generation, with an aim to create 3 million apprentices by 2020, but the truth is that its introduction has been far from plain sailing. Last year, the Department for Education’s own figures showed that the number of employers taking on an apprenticeship had fallen by 59 per cent since the introduction of the levy. If it is really true that there is a skills shortage, that apprenticeships are truly a great way to solve this, and that companies now have a fantastic opportunity to upskill their workforce, then surely employers should be champing at the bit to take on apprentices.
Yet one of the UK’s leading businesspeople, Sir John Timpson, called the levy “nothing but a tax”. Many companies say that they still do not understand the scheme, and quite a few have said privately that they will simply pay the levy and lose the money rather than go to the effort of setting up a scheme. Ouch!
Reflecting on the levy’s first birthday, I think that there are a few barriers to taking on apprentices from an employer’s viewpoint that we need to consider. First, they have to create more jobs. Apprentices are employees by definition, but creating more headcount is difficult in economically uncertain times. Losing 1 per cent of payroll is much cheaper than paying 100 per cent of new salaries. Second, employers have to provide apprentices with 20 per cent off-the-job training. This is a big productivity hit because it means losing a whole day a week on average from a full-time apprentice. Then there is the issue of the limited number of approved apprenticeship standards and how long they take to develop, coupled with the bureaucratic cost of managing apprenticeships and dealing with regulation and funding requirements. Apprenticeships can be fantastic for employers and apprentices – I’m a big fan and would like to see many, many more on offer – but they are resource-heavy.
How could this situation be improved? Let’s get back to basics. What is an apprenticeship? It’s a job, with relevant education and training paid for by employers, and with employers releasing the apprentice to study. So here’s a thought – why not keep it to exactly that? Why not allow employers (and their apprentices) to choose any course they see as relevant, provided employers pay and allow study release? That is an apprenticeship. Why restrict the choice to a narrow range of apprenticeship standards?
A related problem is the bureaucratic cost of managing apprenticeships. Apprentices generally have to build portfolios of experiences, ticking off numerous requirements in the apprenticeship standard. The reasoning seems to be that if the work experience itself is not heavily structured, the apprentices will not learn. But studies on the impact of internships and work placements show that students develop professionally and academically from the genuine experience of work – it does not need to be structured as a learning experience: it simply needs to be authentic work. If the bureaucracy gets in the way of providing more opportunities for proper jobs (and it does), then it should be cut.
Next we should reconsider the 20 per cent off-the-job training rule. The idea is to ensure time for training and education, and I would agree that that is essential. But is 20 per cent needed for all apprenticeships? What if you’re doing the same qualification over four years instead of three or two? It does not make sense for the 20 per cent rule to apply for each year. The amount of release time should be related to the number of credits being studied in that year, and possibly to the level being studied. For more experienced learners doing a master’s degree apprenticeship, 10 per cent off-the-job training might be sufficient.
Most apprenticeships have traditionally been offered in small and medium-sized enterprises, not large companies that are now subject to the levy. The levy is great in that it cajoles bigger companies to get in to apprenticeships, but the funding focus has shifted away from SMEs in the meantime. It is therefore no surprise that apprenticeship numbers have dropped. The two rounds of funding calls for SMEs that resulted in virtually no additional funding were a disaster for apprenticeship numbers.
SME funding will apparently become part of the levy pot next year, but the rules and amounts remain unclear, which has to change if we are to expand apprentice numbers. How about this: we make as much funding available for SME apprentices as there are companies willing to take on apprentices. After all we now have uncapped numbers for degree students – why not for apprentices? We justify the numbers on degrees by saying that their employability skills are being developed and that that will help the economy, and that their future salaries will contribute to taxes. Can we not make both those arguments even more strongly for apprentices?
In many respects, these hitches are an inevitable part of implementing a programme of this size and, irrespective of these initial challenges, I am sure that the levy will be a force for positive change in the education sector for a number of reasons. It improves young people’s opportunities, boosts much-needed industry-relevant skills, and helps to diversify career choices beyond the traditional university degree. However, one year on, it needs policymakers to rethink how it is functioning and its relationship with the businesses it is designed to support.
Roxanne Stockwell is principal of Pearson College London.