National Apprenticeship Week gives us an opportunity to consider where our system is going wrong and to devise an ambitious plan to combat in-work poverty, says Andy Norman
There remains fundamental confusion as to what apprenticeships are and who they should be for. Within the context of rising in-work poverty alongside persistent skills shortages, we must set an ambitious vision for apprenticeships to be central to our efforts to build a more inclusive economy.
According to the latest data from the Joseph Rowntree Foundation, there are now four million workers in the UK living in poverty, a rise of more than 500,000 over the past five years. Many rightly point to stagnating wages and the proliferation of low-skill jobs with little chance of pay progression as the driving force behind this trend. In this context, the growing public policy interest in “good work” is unsurprising. Yet while much of this debate has focussed on how we create good new jobs, policymakers would do well to prioritise filling the thousands of well-paying technical jobs up and down the country that businesses are already struggling to recruit for.
While low-paid work has boomed, so too have skills shortages. The percentage of vacancies that are difficult to fill due to a lack of skills has grown from 16 per cent in 2011 to 22 per cent in 2017. The figures are even starker for skilled trades roles, where employers struggled to fill 42 per cent of vacancies in 2017 due to skills shortages, up from 29 per cent in 2013. CPP analysis of online vacancy data and data from the 2017 Employer Skills Survey suggests that there were 230,000 skills shortage vacancies for skilled trades roles in the UK in 2017. These vacancies had a median advertised salary of £26,500, an uplift of £13,850 compared to a full-time living wage job.
Filling these skills shortages and boosting the nation’s pay requires building an effective technical education system, with high-quality apprenticeships as a central foundation. Yet while there are many examples of excellent practice, the co-existence of high levels of skills shortages alongside the growth of low-paid work suggests that achieving this goal remains some way off.
It is vital for the sector as a whole to take a step back
The recent report from the National Audit Office into value for money in the apprenticeships programme confirms that the system continues to face significant challenges. The report highlights problems of business apathy to the levy scheme, ongoing quality issues and the dual risk of falling participation and budget overspend. Yet perhaps more importantly, its findings also reflect an absence of any overriding vision or sense of purpose in apprenticeship policy. It confirms fears that some levy-paying firms are simply replacing existing training programs for already highly qualified staff with apprenticeships.
At the other end of the spectrum, apprenticeships remain susceptible to exploitation, with some employers offering low-level apprenticeships that appear indistinguishable from the low-skill work they should be moving people out of. Low progression rates out of level 2 apprenticeships compound this issue, with CPP analysis suggesting that 37,530 16- to 18-year-olds each year miss out on an earnings boost of £2,100 as a result.
Apprenticeship policy should not prioritise additional training for already highly skilled professionals, nor should it trap young people in damaging cycles of low-level training and low-paid work.
Apprenticeships should be high-quality vocational pipelines to prosperity, connecting young learners and those in low-paid work with the good jobs employers currently struggle to fill.
National Apprenticeship Week 2019 provided an important opportunity to celebrate the many examples of exceptional provision up and down the country. But it is also vital for the sector as a whole to take a step back, consider where our system is going wrong and develop an ambitious vision for the future based on driving inclusive growth. The alternative is to accept the status quo and allow the inexcusable coexistence of skills shortages and in-work poverty to endure.