With the government looking at a “radical” overhaul of the way apprenticeships are funded, Neil Carberry looks at the key considerations for any such changes.

Apprenticeships are a remarkable link between our economy’s pre-industrial past and its globalised future.

In the Middle Ages they were a contract between master craftsmen and workers. Apprentices learned the expert skills and would pass on their knowledge to the next generation.

The same basic tenets are now central to how the UK creates a highly-skilled workforce fit to compete internationally in the 21st century.

The entrepreneur Doug Richard was right when he said there was “universal agreement that apprenticeships are a good thing,” in his review for the government.

But he was also spot-on in arguing we’ve drifted from their original philosophy.

Instead of employers designing relevant courses and deciding how best to deliver them, the system is weighed down with rules and regulations.

The need to get this right has never been so important.

Stop looking enviously at the gold-standard systems in countries like Germany and build our own

We’re facing critical skills gaps in sectors where we need to generate long-term growth, and without a strong base at both graduate and technician level, we will fall even further behind.

Yet interest in apprenticeships hasn’t been as high in decades.

Employers want the right attitude; practical industry experience and decent technical skills so young people are asking rightly whether university is always the best way to provide that.

Alternative routes which give them top quality training, a guaranteed job and no debt is a big carrot for firms, working in partnership with FE providers, to dangle in front of sixth formers.

So this is a watershed moment. It is time to stop looking enviously at the gold-standard systems in countries like Germany and build our own to rival theirs.

Business welcomes ministers’ backing for Mr Richard’s recommendations, but the devil will be in the detail.

Everyone agrees that employers, not bureaucrats, must be in the driving seat. So we need to overcome three tests over coming months and years to genuinely achieve this.

Firstly, we must sweep away the current labyrinthine funding system.

To drive up standards, firms must directly buy-in high-quality, relevant provision themselves, rather than grants being routed through providers, Skills Funding Agency and Higher Education Funding Council for England.

A tax credit is the best solution on paper, where firms claim back the costs of training apprenticeships through the PAYE system.

But it will need detailed piloting to ensure that it doesn’t weigh down firms in paperwork and to ‘grandfather’ existing good provision to ensure a smooth transition.

Secondly, we must make it easier for small and medium-sized enterprises (SMEs) — the lifeblood of the economy — to take on apprentices.

Reforming funding on its own is not enough. We need to slim down inspection, assessment and compliance to common sense levels.

Too many growing firms are struggling to recruit highly-skilled staff without hollowing out their own supply chains or having talent staff poached by bigger firms further up the ladder.

So we need to get industries consolidating training budgets and expertise within their sector and region — and working providers to tailor courses for their specific needs. SMEs are a vast untapped market and we cannot afford for them to miss out.

We need radical reforms to boost the provision of alternatives to universities

And thirdly, we must better sell apprenticeships to young people at an earlier age. It does not start at 16.

The Confederation of British Industry (CBI) wants much clearer routes into technical education from 14; tougher, new vocational ‘A-levels’ at 18; and, for all students to study English and maths throughout their school and college careers.

We need to tackle the perception the traditional A-level/three-year degree model is the only route to a good career.

We need radical reforms to boost the provision of alternatives to universities — in FE and in work, as well as business-backed degrees

The prize is clear — lean, competitive industries and long-term growth. This is a key moment for government, the education sector and businesses to step up to the plate.

Neil Carberry, director of employment and skills, CBI


Neil Carberry will be among a number of speakers at a Parliament debate on apprenticeship funding on Wednesday, September 4.

It will be hosted by Shadow Skills Minister Gordon Marsden and sponsored by Pearson.

Coverage of the debate will feature in the first edition of FE Week (dated Monday, September 9) for the new academic year.


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