Young people question value of apprenticeships amid mounting criticism of levy

Mark Wright says young people’s views of the Apprenticeship Levy aren’t all that positive.

It has been over a year since the Government introduced the Apprenticeship Levy – an attempt to plug the skills gap.

However, there were probably not many champagne corks being popped at Whitehall to mark the anniversary as it faced a decline in the number of apprenticeships, a delayed rollout and heavy criticism from businesses.

The main concerns over the past year have been that the system was not ready when it was launched, a lack of clarity about how it worked, the creation of ‘low quality’ apprenticeships and there are calls for a fundamental reform.

Ofsted has warned that the quality of apprenticeships has dropped while the number of people taking up the option has also declined. Official Department for Education data have revealed a 25% year-on-year drop.

The Apprenticeship Levy works like this: Businesses with annual wage bills of £3m or more are required to pay the levy of 0.5% of their payroll cost into a training fund, which they could then draw on. Smaller companies do not have to pay the levy but are expected to pay 10% of the cost of training an apprentice with the Government making up the remaining 90%.

We do need to find ways of filling the skills shortages and offering a paid alternative to a university education with an almost guaranteed job at the end certainly benefits the apprentice.

Smaller businesses were expected to take advantage of the service from next year but the Department for Education executive agency has said it is delaying that element of the programme until March 2020. In its own words, it said the delay was necessary ‘to give time for employers and training providers to prepare to take full advantage of the new approach and to keep stability in the marketplace.’

The intent behind the Government’s aim to get three million people into apprenticeships by 2020 is perhaps laudable. But it has been badly executed.

We do need to find ways of filling the skills shortages and offering a paid alternative to a university education with an almost guaranteed job at the end certainly benefits the apprentice. Equally, it seems the issue is that apprenticeships have never been able to completely shrug off the perception of being seen as second rate.

Prime Minister Theresa May alluded to this when she launched a review of post-18 education and funding at Derby College in February this year. She said: ‘And there remains a perception that going to university is really the only desirable route, while going into training is something for other people’s children.’

Unfortunately, it seems that many of the people who are most likely to be the target of apprenticeships share the same set of values.

Despite the emphasis placed on the importance of closing the digital skills gap, young people remain uncertain as to how or where to receive support for developing a career within the digital sector, particularly with such small value placed in apprenticeships or university degrees.

This needs addressing for the Apprenticeship Levy to be successful and for the country to make good headway in closing skills gaps. In particular, the digital skills knowledge gap is one area that needs to be plugged quickly.

The House of Lords identified a ‘digital skills crisis’ in 2016 and there are calls to make it as important as numeracy and literacy in schools. Almost every industry has gone through some kind of digital transformation and the need for these skills has increased exponentially over the past couple of decades.

Young people also recognise the importance of bridging the digital skills gap, the study found. A vast majority of young people believe that professionals of all ages would benefit from learning digital skills such as marketing or coding. For SMEs, rather than waiting for the Apprenticeship Levy to eventually kick in, the time for action is now.

Online training, workshops and courses for employees could all help prevent the skills gap from continuing to widen. Valuable time is being wasted while access for small businesses to the levy is pushed back, not only for businesses but also for employees who are missing out on the opportunity to improve their skills.


About the author

Mark Wright is director of Climb Online and a former winner of BBC’s The Apprentice.


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