Conservative manifesto pledge: Continue with the target of 3m apprenticeship starts by 2020

Joe Dromey argues AGAINST

The three million target mostly fosters growth at level two, and gives little progression, argues Joe Dromey

The Conservative manifesto again included a commitment to deliver three million apprenticeships by 2020. It’s easy to see why. It is clear and comprehensible pledge which works well for a party seeking to rebrand itself and pitch for the votes of ordinary people. But it is a bad policy which risks driving a focus on quantity alone, potentially at the expense of quality.

Even before the recent reforms to the apprenticeship system, there were concerns about the focus on quantity over quality. The growth in apprenticeships in recent years has been driven by a surge in the number delivered at lower levels. Most apprenticeships are at level two, and 94 per cent are below level four. While the numbers of higher and degree-level apprenticeships is growing, they are a fraction of the total.

The labour market returns for vocational qualifications at level two are relatively poor. We may be less concerned about poor wage returns for low-level apprenticeships if they lead to higher-level qualifications, but for too many the level two apprenticeship is the end.

In seeking to make the system more employer-led, the government has introduced the levy, which will raise £3 billion from large employers by 2020/21, delivering a huge boost to employer investment in apprenticeships. At the same time, the government has put employers in charge of designing apprenticeship standards and removed the requirement for apprenticeships to contain a recognised qualification.

The levy is a welcome recognition of the need to intervene to boost employer investment in training. UK employers invest far less in training than our EU neighbours, and investment has declined. However, there is a risk that under the new system employers will seek to recoup their levy funds by rebadging existing training as low-level apprenticeships, which offer limited benefit to the individual, and limited progression.

Labour committed to keeping the apprenticeship levy, but not the target. It would double the number of apprenticeships delivered at level three. In 2015/16, there were 191,000 apprenticeship starts at this level, 37 per cent of the total. They have also pledged to guarantee trade union representation on the Institute of Apprenticeships.

Whoever forms the next government needs to focus not just on the quantity of apprenticeships, but on the quality of training and how employers are using skills in the workplace to boost productivity.

While employers should be given a role in shaping the system, empoyees deserve a say too

The arbitrary target should be abandoned, with the focus shifting to quality and progression. The government should drive up both the proportion of apprenticeships delivered at level three, four and above, and ensure that level two leads to career pathways and higher qualifications. There should be robust monitoring and reporting of outcomes following apprenticeships, to ensure that they are delivering strong wage returns and progression to higher level qualifications.

We also need to look again at the governance of the system. There are benefits in an employer-led approach and it might work well in high-skill sectors with a strong sense of occupation formation and a collective commitment to training the next generation of employees. However, it is less likely to work in the low-skill, low-productivity sectors which account for much of the growth in apprenticeships, and much of the low-quality provision.

As part of a modern industrial strategy, we must develop strong sectoral institutions to drive a collective commitment to skills. These institutions should support demand for, investment in, and use of skills as part of a drive to boost productivity. While employers should be given a role in shaping the system, employees deserve a say too, both at sector level, and in relation to the way standards are set through the Institute of Apprenticeships.

We should learn from the most successful apprenticeship systems on the continent, which are characterised by a social partnership approach, with government, employers and unions working together to ensure the system delivers high quality training that works for all. While employers are vital in shaping the system, employees must be given a voice too.

Joe Dromey is a senior research fellow at IPPR

Conservative manifesto pledge: Continue with the target of 3m apprenticeship starts by 2020

Mark Dawe argues FOR

Fears over quality are misplaced: three million is a modest target, but the right one, claims Mark Dawe

The Conservatives were right to retain their 2015 pledge of three million apprenticeship starts by 2020. Even without the subsequent levy-related reforms, the original target was always going to be a fairly modest goal, especially if we recall that there were over 2.5 million starts during the coalition government of 2010-15.

Nor does the three million figure present the scale of challenge, or tension over quality, that some observers want us to believe. Three quarters of apprenticeships are delivered by independent training providers, and the latest Ofsted annual report found that 82 per cent of ITPs were good or outstanding. The government’s own ‘Get in, Go far’ campaign also rightly stressed the positive outcomes that apprenticeships generate for both employers and young people.

The worries about using starts as a target have been overstated. We are not suggesting that they represent the ideal measure of success, but a switch to a programme completions target would be a mistake.

Since the May administration entered office, ministers have referred to apprenticeships as a “ladder of opportunity” and a driver for social mobility, and AELP has always stressed the programme’s importance in terms of social inclusion. If we moved to a completions target, then employers and providers would shift their recruitment of apprentices to only those most likely to complete, when presently there are thousands of young people who start an apprenticeship from a position of disadvantage who then make amazing progress and go on to build a successful career for themselves.

In the same vein, ministers deserve credit for recognising that level two apprenticeships provide a vital starting point for many young people and the social mobility agenda demands that there should be no departure from this policy. If the new ministers get a grip on the current reform issues after the election, employers and young people can look forward to benefiting from quality apprenticeships up to level seven.

The Conservative manifesto started by setting out ‘five giant challenges’ that Britain has to meet and we believe that skills and apprenticeships have a fundamental role to play in overcoming all of them as follows:

• The need for a strong economy: Improved productivity through increased skills
• Brexit and a changing world: Support many industries in replacing their workforce by making lower-level skills training available
• Enduring social divisions: Availability of training opportunities no matter where you live, whatever your starting point
• An ageing society: Making retraining and apprenticeship opportunities available to anyone whatever the size of employer

Fast-changing technology: Proper investment in digital skills development at all levels, embedded in all programmes.

The emphasis on making opportunities available wherever you live is why AELP is pressing for properly sustained and guaranteed support in the non-levy-paying business community – which is not just a reference to apprenticeships. But above all, the three million apprenticeships target should not be achieved with apprentices only employed by levy-payers. We need guaranteed apprenticeship funding for non-levy-paying SMEs of at least the current level of £1 billion per year and the non-levy-payers on the apprenticeship system as soon as possible in order to generate a genuine employer-led system. An immediate review of the impact of employer contributions on the SME apprenticeship starts is also required.

On quality, the Institute for Apprenticeships should work with key stakeholders to ensure that all existing and new apprenticeship standards are fit for purpose, their assessments are valid, reliable and available, and there is adequate funding to deliver a quality programme. Until these criteria are met, apprentices shouldn’t be started on new standards.

Mark Dawe is CEO of the Assocation of Employment and Learning Providers

Conservative manifesto pledge: Introduce significantly discounted bus and train travel for young apprentices

Verity O’Keefe argues AGAINST

The manifesto pledge to support apprentices with discounted train travel is hard to argue against –but does it go far enough?

We think not. The pledge seeks to solve the problem of young people being put off from taking an apprenticeship because they can’t afford the associated travel costs. However, the real issue stopping many young people signing up for apprenticeships is the paltry wage rate of just £3.50 per hour.

If the next government really wants to put apprenticeships on the map and demonstrate to school leavers that they are a viable, credible career pathway to quality employment, they must pledge to raise the apprentice pay immediately.

Boosting apprentice pay is something EEF, the manufacturers’ organisation, has called for in its recent submissions to the Low Pay Commission. We see a strong argument to protect the apprenticeship brand and safeguard quality admissions by increasing pay, alongside other incentives to attract more candidates such as the proposed discounted travel initiative.

Governments have never set out what they mean by quality when it comes to apprenticeships but we think it can be done. Quality should be determined on the positive outcomes achieved: long-term employment, opportunities for career progression, salary thresholds. Importantly, these are influenced by factors during the apprenticeship, including the length of the apprenticeship, the level of training and what is paid to the apprentice during training.

So to what would we increase pay? The age-specific minimum wage rate. Such a move won’t complicate matters, it will simplify them. And what employer wouldn’t want an easier life after the raft of apprenticeship reforms, in particular the apprenticeship levy?

The apprentice rate is currently set at £3.50 per hour, applying to apprentices under the age of 19 or in the first year of their apprenticeship. Any apprentice outside these parameters is paid their age-specific rate.

This is easy to understand if the apprenticeship on offer is 12 months long, where no matter what age the apprentice, they are entitled to £3.50 per hour. Not so easy when your apprenticeship, as is the case in engineering, lasts for four years. An apprentice starting aged 25 would be eligible for £3.50 per hour their first year, but that would increase to £7.50 per hour in the second year when they become eligible for their age-specific rate.

Increasing pay could attract better quality candidates

So why not make it easy and simply pay apprentices their age-specific rate from the start? Those employers that do recruit apprentices aged 16 would pay £4.05 until they turned 18, which is not a huge hike up from the current apprentice rate.

And if the apprentice rate is to do what it was set out to achieve at its introduction – strike the balance between a minimum wage level that prevents the exploitation of apprentices and wage costs being so high that they reduce the opportunity for employers to offer young people training and employment – then this is a fair argument.

But it’s not just about making things easy. Increasing pay could attract more and better quality candidates to take apprenticeship vacancies. We know manufacturers plan to increase apprenticeship numbers, and the levy will undoubtedly lead to other employers doing the same, however this will come to nothing if it is not met with demand.

Of course there are major challenges to tackle careers provision in schools and move parents away from the mind-set that apprenticeships are for other people’s children, but increasing pay is surely an attractive selling point?

Our own pay benchmarking data and previous government apprentice pay data reveals that pay for engineering apprentices is almost double the minimum rate. On top of that, apprentices in engineering are more likely than others to receive bonuses as they progress on the learning pathway. We know pay is not the problem in our sector. Our industry needs to shout louder that pay in manufacturing and engineering is higher than average, but in addition we also need to lose the tagline that the apprentice rate is still just £3.50 per hour.

So, by all means offer discounted travel for apprentices, but a real boost to apprentice pay would more than pay for the bus.

Verity O’Keefe is head of Education & Skills Policy at EEF the manufacturers’ organisation

Conservative manifesto pledge: Introduce significantly discounted bus and train travel for young apprentices

Frankie Linn argues FOR

The Conservative manifesto commitment to an apprentice travel discount is a pleasant reminder that sometimes politicians listen. That sometimes including the ‘apprentice voice’ in meetings isn’t tokenism. That all those meetings and emails and trips to London might actually be worthwhile. Of course the money it’ll save will be useful but the most exciting thing about this announcement is that we know that when we get apprentices together to speak to decision-makers, things can change.

The National Society of Apprentices delivers the apprentice voice at a local, national and European level, supporting apprentices to reflect on their apprenticeships and engage with decision-makers on the issues that affect them. This announcement shows us that it works.

In 2014 one of the first things we did as the national society was to go and ask apprentices about travel. The message came back loud and clear: apprentices were paying too much on travel. Back in 2014 it was £24 a week and we can’t imagine it’s got any cheaper.

This means that working 35 hours a week for £3.50 an hour, travel consumes 25% of an apprentice’s weekly wage. Essentially that works out as working until your morning tea break on Tuesday just to pay your bus fare.

Here are some of the comments we received from apprentices:

“I worry a lot about my money situation … it puts a hard strain on me. Getting to work each day financially is a struggle”

“I’m enjoying my apprenticeship, however worrying about my financial situation is a regular occurrence”

Discounted bus and train travel is a change that will make a big impact on younger apprentices, who are more likely to be paid £3.50 an hour. We’ll know exactly how many that is once last year’s apprenticeship pay survey is finally published (cough, cough). This change means that fewer apprentices will have to rely on a second job, or worry as much about getting into debt.

Apprentices are a pretty positive, proactive bunch, but 40% of us regularly worry about money. We’ll have to wait and see exactly how the transport offer pans out and how it compares to the new MY Travel Pass in Wales and the changes afoot in Scotland. That said, when many of us are paying a quarter of our wage getting to work, a little help won’t go amiss.

Frankie Linn is part of the leadership team at the National Society of Apprentices