Apprenticeships: Who are they really for and is government funding benefiting those who need it most?

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24 Feb 2020

Becci Newton

Becci Newton, Deputy Director, Public Policy Research

Follow @beccinewton13

There’s been a lot of news about apprenticeships, not much of it good, although the award of Apprentice of the Year to Todd Scanlon, a young man with Down’s syndrome - given the need for greater inclusion in the programme, is worth celebrating. But, overall, the apprenticeship waters remain choppy. The number of starts again declined this quarter, with the drop being steepest for young people training at lower levels; the now defunct target looks unreachable. We could attribute this to the amount of change in the system – change takes time to bed in. But is that too easy and should we question whether we are positioning apprenticeships and secondly their government funding optimally? These two issues while connected, require separate consideration.

Apprenticeships and their purpose have been contested over many years. Since the mid 1990s, ‘framework’ apprenticeships have dominated – these offer combinations of NVQs, technical qualifications and English and maths. Frameworks were designed to provide pathways through occupational levels, and NVQs were suitable for adults in work and people new to occupations, including young career entrants.

However, NVQs were criticised for emphasising accreditation of existing skills over training for new skills - and this infected the apprenticeship agenda. The Specification for Apprenticeship Standards in England provided a first step to overcoming this by setting minimum training durations for funded apprenticeships, as well as making off-the-job training a requirement.  The Richard Review heralded increased employer ownership: involving them in specifying new Standards for apprenticeships in order that they deliver the skills employers need, as well as through co-funding. The new Standards, which focus on one specific occupation, retain notions of minimum training durations and as they come on-stream, the NVQ tap is being turned off.

While minimum durations work well for people truly new to occupations, they are not the solution for those adults who already possess some of the skills required which means their training needs do not meet the minimum duration. Yet the numbers of adults (aged 25 and over) involved in apprenticeships is close to 40 per cent of the cohort so employers must see the value of these longer training programmes for adults (or at least, are willing to capitalise on the available funding by offering them). For adults whose existing skills mean they cannot reach the minimum duration (assuming accreditation of prior skills is effective) a new solution is needed. At present, apprenticeships – because of the policy emphasis on substantial training – cannot meet their needs.

However, the truth is that most people think that an apprenticeship is a career entry route and mostly targeted at young people. Nevertheless, the agenda to raise quality by setting more apprenticeships at Level 3 and beyond, means that new Standards offer a range of entry points from those traditional notions, to high level occupations, including those that require degrees and Masters.  Stereotypes of apprenticeships as focused on craft skills no longer hold true. The most recent reforms have opened up new qualification opportunities, and apprenticeships can support people to not only enter, but to qualify at higher occupational levels, which should deliver benefits to the economy.

But this brings us onto my second question – what is government funding of apprenticeships for?

The government (via IfATE) sets each of the new Standards a funding cap and from the earliest phase of development committed to co-investment with employers. The level of employers’ expected co-investment has been diluted over time, but the principle that employers should pay is maintained. The introduction of the apprenticeship levy has provided perhaps the strongest challenge to the ownership agenda.

Large employers (with a salary bill of £3m+) now pay into the levy pot, and can use their pot to provide apprenticeships. However, this has not led to the wholesale delivery of apprenticeships amongst affected employers – and as such, the levy is seen at the heart of the numbers challenge. Intuitively, where employers have used the levy pot, it is to best support their own needs, and this has included targeting existing workers for training, often at high levels, raising new concerns for the purpose as previously employers may have funded this. There has been less evidence of a shift to providing new career entry routes for young people – and this is a key criticism of the apprenticeship levy – although it is worth noting that the number of starts at Degree levels has increased against the current trend.

More broadly, it raises a question of who government funding should support since the levy is also part of the means to managing the government’s contribution[1] – is it right that already qualified workers are funded to train to higher levels? And does the funding model between Degree+ apprenticeships and full-time higher education strike the right balance? Arguably, government funding should focus on supporting the creation of career entry opportunities as well as closing the gap – helping to raise skills levels at the bottom end – as we know this has huge economic and social benefits, and underpins progression in work. Perhaps a taper for the government investment would get around this, although would it add complexity?

These changes would not be popular in an already contested environment, and wouldn’t result in a rapid adjustment to the trends we see in starts. But if government funding more clearly focused on raising up those at the lowest skills levels – as it does under other skills agendas, employers could then take on training at higher levels to deliver the productivity they need.

More certainly, young people need better quality routes to the labour market, and low qualified adults need training that can help them progress or change careers, and apprenticeships have potential to offer this; but the funding and other incentives are not there for employers to use them in this way.

As our other research has shown, the types of work young people now do are often low quality with poor pay, and T&Cs, compared to 20 years ago, certainly without training. If we don’t put apprenticeships at the heart of creating change we could be saving up huge economic and social problems, as young people struggle to build the foundations for a satisfying and productive life.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.

[1] A different funding system operates for smaller employers, whereby they are expected to contribute 5 per cent of the cost of training and assessment