The British public love apprenticeships. But nationally, the number and proportion of young apprentices are declining. Far too few apprentices– only about 20 per cent – are in ‘skill shortage’ occupations. And far too many are older adults sponsored by their existing employers who want to use up their levy.
Many of these problems are the result of the unique and dysfunctional design of our levy system. Unlike in other countries, ours is paid by just a few firms and organisations. It also provides the entire apprenticeship budget, since the Treasury does not top it up in any way. Levy-payers are strongly incentivised to use ‘their’ levy up and have become increasingly successful in doing so – hence the huge rise in apprenticeships for older, often quite senior employees.
The levy badly needs reform. But in my recent paper for the Social Market Foundation, I argue that the problem with our system isn’t just the levy. It is also the centralisation of spending and administration in Whitehall.
This is particularly bad for small employers. They are rarely involved in standard-setting, do not understand how the system works, often struggle to find a training provider and have no stable and local port of call from which to get advice. All this on top of a system which leaves less and less apprenticeship money unspent by levy-payers and available for SMEs – who are the backbone of the economy and the source of future growth.
It’s time for us to follow the example of every ‘top’ apprenticeship country and make local authorities and organisations central to delivery. In Switzerland, the cantons (member states) play the major role: in Germany it’s the chambers of commerce, which have a statutory position. Here, it should be the mayoral combined authorities (MCAs) which are already receiving devolved adult education budgets (AEBs).
Ben Rowland, the chief executive of the Association of Employment and Learning Providers, argued in these pages that my suggestion was a terrible idea that would take us back ten years. He doubted that I had even ‘bothered to actually ask employers what they want’. On this point: not guilty. I talk very frequently to employers of every type. I’ve experienced, first hand, what it’s like to be a small employer taking on their first apprentice. And in my time as a government adviser, I was lobbied on apprenticeship by a good many employers. That has taught me that different employers want different things!
My proposals concentrate on making apprenticeships work better for small businesses and young people, as the current system manifestly doesn’t. But there is a broader point as well. Apprenticeship isn’t just about an individual company sorting out its immediate training needs. If it were, there would be no reason for governments around the world to support it as they do. A country has a strong interest in making sure that future skill needs are met, and in helping localities to encourage local growth and new industries, including via apprenticeship support. A good apprenticeship system has public benefits: it is not just about today’s employers.
Encouraging apprenticeships in key local sectors is almost impossible unless there are local powers and budgets. But this country has become uniquely centralised. Governments talk devolution, but getting any genuine increase in local autonomy is painful and slow. Witness the current bill abolishing the Institute of Apprenticeship and Technical Education as an independent entity, and delivering all of IfATE’s powers back into the hands of the Secretary of State.
The inevitable query is whether MCAs are up to the task. They will be new to it, without the many decades of stability that underlie the best European systems. But the critical question isn’t whether they will do everything perfectly. It is whether they will do better than the current system. They are certainly showing every sign of doing so with the AEB. MCA teams know their areas, and their providers. They will be far less subject to the constant changing of ministers, each with their special preoccupations – and the impossibly short timelines for delivery that come with them. It’s time to devolve.
Alison Wolf demonstrates perfectly how out of touch she is with what really happens in the apprenticeship world.
Devolution would simply result in massive procurement exercises, administered by incompetent authorities, resulting in employers being completely turned off apprenticeships. It would be a disaster. Devolution has failed to deliver any significant change in adult funding, and so it would be for apprenticeships.
Totally agree
here here – you only have to look at the AEB contracts in devolved areas.
How odd I thought an apprenticeship was a job with training with wages paid by an employer not the state.
The foreign examples represent fundamentally different systems and in many of the systems employer representative bodies play a key role.
Alison wolf’s views just don’t make sense in this context. But then again isn’t she the behind the scenes figure that has led to chaos of t levels and btecs. An academic from a theoretical world .