The apprenticeship levy was a brave move for a Conservative government. But unless it gets to grips with apprenticeships now, a generation of young people will be the big losers, warns Conor Ryan

The government says it wants to see three million more apprenticeships by 2020. Promises of improved quality, and the push on large employers through the levy, are meant to ensure that the ambitious numbers deliver a better trained workforce.

But the reality may fall far short of the rhetoric. Last week, new figures showed a big drop in apprenticeship starts between April and July this year. Today’s Sutton Trust report Better Apprenticeships highlights how the levy could produce perverse incentives. Analysis by Lorna Unwin and Alison Fuller notes that one way employers can circumvent the levy is by converting existing employees into apprentices. Of course, in doing so they may give them new skills, but without robust checks they may simply accredit existing knowledge.

That was something that bedevilled Gordon Brown’s flagship training programme, Train to Gain, in the first decade of this century.

When I was education adviser to Tony Blair in Downing Street, we were desperate to remove the substantial deadweight cost caused both by such accreditation or paying a subsidy for existing training. Yet in their 2009 report, the National Audit Office found that half of employers using the money from the programme said they would have arranged similar training without public subsidy.

One way employers can circumvent the levy is by converting existing employees into apprentices

The levy was supposed to address the latter point by shifting the costs to employers, but the danger is that it does little to develop new skills. Moreover, the public perception of apprenticeships is that they are targeted at young people – largely school leavers – and that they are a practical way for them to gain good qualifications, earning while they do so. But, in reality, the latest government survey suggests two thirds of apprentices are conversions.

It is vital that there are tough minimum expectations in every apprenticeship, so that they give apprentices the expertise and capability to adapt to a rapidly changing labour market and they do not become a bureaucratic burden on business to be dodged by clever accountants.

This is not the only problem with how apprenticeships have developed in England. Instead of being a high quality programme targeted at enabling young people to start a fulfilling career, they have become a catch-all title for training at all levels. So, over 40 per cent of all apprentices are aged over 25, largely at work. Of course, adults at work need upskilling, but they are not apprentices, and those positions should be targeted at young people, particularly those entering the workforce.

And then, among apprenticeships for young people, 60 per cent of places are at intermediate level. New analysis by Sandra McNally for today’s report, of the experience of those aged 16 in 2003 who subsequently embarked on apprenticeships, suggests that fewer than one in four of those who start a level 2 apprenticeship progress to level 3.

The Sutton Trust will be campaigning through 2018 so that in future anyone completing level 2 should automatically progress to level 3, unless they opt out. The focus on apprenticeship starts rather than overall apprentice numbers in the government target does a disservice to young people. McNally’s research also shows that those doing advanced apprenticeships are less likely to be from disadvantaged backgrounds, but those doing level 2 are more likely to be disadvantaged, so such automatic progress is vital to their social mobility. One interesting point in last week’s figures was that intermediate starts had fallen faster than advanced starts, suggesting that a seamless progression could be valued by employers, even if they don’t like the levy.

Good apprenticeships can lead to earnings on a par with academic qualifications, from level 3 through to higher apprenticeships. So, the focus should be on creating more such opportunities for young people and supporting progression to them.

The apprenticeship levy was a brave move for a Conservative government. But unless the government – and the Institute for Apprenticeships as both a quality and access guarantor – gets to grips with apprenticeships now, the danger is that no government will be so brave again. And more importantly, a generation of young people will be the big losers.

Conor Ryan is Director of Research at the Sutton Trust

Read more: Two thirds of apprenticeships ‘convert’ existing employees, new report warns