The PM’s apprenticeship reforms are a drop in the ocean

Last week, the Prime Minister announced a package of reforms to unlock a “tidal wave of opportunity” for UK apprenticeships. This included an additional £60 million, which he claims will provide up to 20,000 more apprenticeships. Sadly, this amounts not to a tidal wave but to a drop in the ocean.

The new reforms are somehow meant to work such wonders by funding college fees for small businesses. But the reality is that non-levy paying employers only pay 5 per cent of these fees as it is, amounting to a maximum of £450 – this is not the barrier to generating apprenticeships. And even if results materialise, 20,000 new apprenticeships across all sectors won’t even touch the sides when construction alone needs more than that.

This is about far more than educational opportunities for young people. This is about the foundation of our country’s social and economic fabric. The Prime Minister is not living in the real world if he genuinely believes these reforms are up to the job.

CITB forecasts the need for 225,000 extra construction workers by 2027 to achieve the government’s own house-building target of 300,000 new homes a year. This equates to 45,000 people joining the industry annually. And that’s not to mention our crumbling infrastructure, with maintenance backlogs across the public estate. But with just 26,100 people going into construction apprenticeships in the year to July 2022 – and a 50 per cent drop-out rate – it is likely we will continue to fall short.

The crux of the construction skills gap is that apprenticeships rely on employment in a largely self-employed industry. What we need is for government to simplify the process to incentivise smaller businesses and one-person-bands to take on apprentices.

Instead, the government talks about lifting 132,000 SMEs out of the levy and funding their apprentices’ college fees. But the levy itself is a broken, backwards system that requires us to hire apprentices to get our investment back. And it’s only one of two in construction, where we also pay a CITB levy.

In the past, the government would fund all apprentices’ college education, while industry would pay salaries (c. £14,000 per year for each apprentice). Now we are left paying for both. It is for this reason we’ve seen contractors halve their apprentice intake. Short sighted, perhaps, but this is the reality. Meanwhile those like Seddon, who continue to invest in people, endure the additional cost.

One of the most common challenges the sector faces is the geographical spread of construction sites. Coordinating the correct work experience to suit the apprentice’s geographical location is highly complex, can lead to high levels of inactivity, and costs employers more than an apprentice’s salary.

This is particularly hard for smaller businesses and one-person bands who represent 79 per cent of the industry, a quarter of whose workers consider themselves to be neurodiverse. Unsurprisingly, just 18 per cent of these businesses choose to take on the administrative burden of employing apprentices. 

This is not helped by how specialised our industry has become. Apprentices aren’t able to reach the apprenticeship standard working within the apprenticeship programme, which is why we have such high drop-out rates. Apprenticeship standards are generally set by larger organisations with the capacity to offer a wider scope of experience. The problem is that they simply don’t employ the numbers required.

Collectively, the smaller companies do, but are excluded from the decision making. The solution is either meaningful work experience like T Levels offer across all trades, or a change in the standard, allowing apprenticeships in specialist areas.

Employment is the issue here, not interest from young people. There is no shortage of people from a range of backgrounds who wish to start their career in construction. The industry is now in the top 10 desirable jobs for teenagers. Last year, we had 480 quality applicants for 17 roles.

The Prime Minister’s lacklustre reforms and vague promise of £60 million won’t do anything to bridge that gap, meet targets or put our infrastructure right. A tax incentive or government grant to help fund employment like we saw during Covid might, but these must be linked to completions, not starts.

Our sector is the bedrock of economic growth and it is in a dire situation. This government or the next one will have to grasp the nettle – and quick.