Former adviser to skills minister calls for temporary ban on new adult apprentices

18 May 2020, 6:00

The response to the pandemic recession must centre on supporting those who are finishing their education and those who are struggling to find work, says Tom Richmond

Given the controversy surrounding the apprenticeship levy before the outbreak of Covid-19, it is unsurprising to see calls for the levy to be reformed as part of the government’s response to the economic crisis. In our EDSK report at the beginning of this year, we found that the introduction of the apprenticeship levy in 2017 had already contributed to a steady fall in the proportion of apprenticeships being provided to young people compared to older learners.

If the objective is to prevent young people suffering financial hardship in the coming months, a major package of direct and temporary measures will be required to overcome the challenges posed by Covid-19. Minor policy tweaks and good intentions will prove entirely insufficient. There are three tools that the government has at its disposal – all of which could be implemented relatively swiftly.

First, the government should introduce a temporary ban on new apprenticeships being offered to learners aged 25 and over until, say, the end of 2020. It is often forgotten that “adult apprenticeships” did not exist until 2007, yet they have subsequently swamped the apprenticeship system. In a time of crisis, this cannot be allowed to continue. To cushion the impact of this change on older workers, the government could bring forward some of the funding earmarked for the upcoming National Skills Fund to support those who need to retrain or upskill during this period.

Second, the government should ban apprenticeships for learners who are not new recruits to their employer. The latest Department for Education survey of apprentices showed that 61 per cent of “apprentices” were already employed by the employer with whom they started their apprenticeship, and 42 per cent were working for their employer for at least 12 months beforehand – thus illustrating the amount of funding that could be freed up.

The same survey found that 84 per cent of apprentices aged 25+ were already employed before their apprenticeship began compared to 47 per cent of apprentices aged 19-24 and just 28 per cent of those aged 16 to 18. This means that any restrictions on the use of apprenticeships for existing employees will disproportionately benefit the youngest learners.

Third, the government should rekindle the Apprenticeship Grant for Employers (AGE). In 2012, when over a million young people were unemployed, this grant of £1,500 was given to employers who took on up to three apprentices aged 16 to 24. Eighty per cent of the grants went to businesses that employed up to 25 people, and 85 per cent went to employers that had never had an apprentice before.

The government should reintroduce a more generous version of AGE as part of their Covid-19 response. Small and medium-sized employers would receive £5,000 for every newly recruited apprentice aged 16 to 18 and £2,500 for new apprentices aged 19 to 24. Additional grants of £5,000 would also be given to any employer that has never recruited an apprentice before or has not done so in the past 12 months. There is nothing to be gained by timid action on this front, particularly when employers’ training capacity in terms of staffing and resources is likely to have been seriously curtailed by recent events.

Although such spending might feel like a luxury, England is in fact remarkably stingy when it comes to encouraging employers to take on apprentices (even in the good times). In Austria, companies have received government grants for each apprentice since 2008 equivalent to as much as three times an apprentice’s gross wages. In France, organisations employing apprentices for at least one month can benefit from a tax credit of €1,600 per apprentice per year. In the Netherlands, a subsidy for employers was introduced in 2014 of up to €2,700 per apprentice per year.

While there is no perfect policy waiting to be plucked off the shelf, the response to Covid-19 must revolve around supporting young people who are finishing their education throughout the rest of this year as well as those who are struggling to find work. There is nothing wrong in principle with upskilling the existing workforce, but it would take a brave politician to argue in the current climate that people who already have jobs are more important than those who do not.

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  1. Selina Grant

    Slightly short sighted, many adults are literally taken out of the dole queue because of this scheme, households where people need to retrain in order to stay relevant, would have even fewer avenues to gain skills, something which holds people back in or out of employment. One of the things I love the apprenticeship scheme is as skills shortages become apparent all areas if the working aged population can benefit from on the job training. Was the 84% meaningful employment or people trying to make ends meet taking on whatever the could find instead of developing true future prospects. There is a conversation to be had, but why does it have to be the young vs older learners? Employment/life chances are not as arbitrary as that.

  2. James

    As an adult apprentice employed by an employer for some time after leaving school with no qualifications and fighting to get where I am and only now being able to do an apprenticeship to fill in some missing skills thank you for your wonderful understanding and suggestions that adult learners dont need support

    Of course never mind that half the younger apprentices spend their free time getting drunk and socialising with their cash and many older learners may have family to support so would struggle to find money or opportunities to take missed study….

  3. This policy doesn’t reflect the labour market and the needs of companies, cutting off funding for existing staff will not create new roles for 16 to 24 year olds. The high recruit sectors for young people Hospitality Retail alongside business administration will the hit hard, but other sectors wont pick up those new starts they have very finite needs for early talent and increasingly require higher skilled school leavers.
    To maintain provider viability then employers need to be looking at upskilling current staff in new data technologies, high skilled science and engineering development of change strategic and people management to reflect the new environment. The challenge for the supply side is to react to that demand and to date those reacting fastest are the new agile providers in the likes of data the traditional market needs to look at these new companies and adapt accordingly

  4. Phil Hatton

    There is a good reason why the author is a FORMER adviser. Although the big push for apprentices should be 16-18 year olds (or those who have been conned by their schools with no mention of apprenticeships in their impartial careers advice to take A levels, but who do not want to progress to a degree with limited job prospects) and 18+ school leavers. However, I have recently seen employers who promoted workers to management positions and put them on appropriate apprenticeships to support them to be effective in their new roles. So much for the autonomy of employers and the implementation of the Equality Act? The under recruitment of younger apprentices is much more to do with the failings of government strategies to promote apprenticeships through schools and to employers, informed by their advisers. No wonder someone at No 10 wants to change the types of advisers that government attracts…………

  5. what is the purpose of this? Employers have been given a say in what they want (and the largest are paying) and have worked with providers to achieve that. I struggle to see how this thinking helps new and existing employees? Why kill off such a massive opportunity? Apprenticeship starts are down enough already.
    This whole article is built upon wrong assumptions , poor understanding and what appears to be utter fantasy in regard to finance.
    Standards (and often frameworks) give quality providers and good employers a great opportunity to design programmes for real and lasting benefit. Good providers make a difference to learner’s lives and the chances ahead of them, regardless of age or experience.

  6. Jackie

    In a time when Training Providers and Colleges are working hard to adapt delivery and support all apprentices, it is hard to read such a short sighted article. We have many ‘Adult’ apprentices who are working in the NHS. They are using the Apprenticeship to develop their careers correctly, Our staff are supporting them on a daily basis to cope emotionally with their own situations and improve their knowledge.
    If as you suggest, we switched off funding for new enrolments ( which are already predicted to be significantly lower then normal) this will result in two key ways 1) our coaching staff being put at risk , with lower caseloads then in financially viable, and jobs will be lost 2) all those workers that we currently engage will lose the support that they are currently receiving.
    No Knee Jerk reactions please – we all have enough to cope with!