Stick with the Apprenticeship Levy - it'll pay off.

Written by Professor Lynette Ryals on 5 June 2018 in Opinion
Opinion

Professor Lynette Ryals urges businesses to remain positive about the Apprenticeship Levy.

Apprenticeships have become an easy target for criticism. The Times this month repeated claims that universities are simply 'exploiting' the apprenticeship levy by setting up Master's degrees and MBA programmes to tap into the new funding opportunity. The newspaper called on a plumber's business to comment on its need for school-leaver trainees, not 'overqualified managers'.

At the core of the problem, and the heat of the attitudes, is the language of 'apprentices' and 'apprenticeship'. Using this kind of label to describe such a broad range of skills and career development has led to confusion - and obscured the debate over what employers actually want and need.

An apprenticeship may once have been entry-level training for school-leavers; it's not anymore.

The new apprenticeship model is based on the principle of learning and development from recognised providers that is also employer-led and employer-funded - a virtuous circle delivered by a programme that’s rooted in specific job roles and the actual work demands of the sector context.

There are obvious benefits to the employer in terms of relevant skills, development and productivity, which in turn encourages them to invest further. Apprenticeships are going to be an important option for more school-leavers, but this isn’t the only urgent need among employers.

In this context, the Reform think-tank report - claiming a 'mislabelling' of courses - just looks remote from the realities of business needs. The report only adds to the muddled commentary around apprenticeships where they are seen as being exclusively for young people entering the world of work.

Apprenticeships are going to be an important option for more school-leavers, but this isn’t the only urgent need among employers.

The UK is recognised by the OECD as having a ‘long tail’ of low skilled workers. In terms of the proportion of adults with higher level qualifications, and despite the strength of its HE system, the UK is ranked only 11th (OECD, 2015).

This means that we have large numbers of employees trapped in lower-level posts and in need of upskilling to play a full part in the digital economy. At the same time we have employers frustrated by a lack of the right skills at higher levels. Upskilling their workforce will enable experienced employers to move into more senior roles and free up entry-level positions for younger people.

The strength of the apprenticeship system is that it works at every level from 16 year-old school leavers without academic qualifications to high-flying middle-managers trying to take the next step up in their career. You can take up a GCSE equivalent apprenticeship with an FE college or you can do a prestigious MBA, at a place like Cranfield.

It doesn’t have to be, and shouldn’t be, a case of either or.

Yes, as Reform says, we should be encouraging more young people into apprenticeships, where appropriate, but for the sake of UK productivity, we should recognise the role apprenticeships can play in addressing the UKs desperate need to upskill our existing workforce as well.

The UK’s lack of higher-level skills is constraining the UK’s economic growth and apprenticeships can play a key role in addressing this.Management skills are an important example of where the UK struggles to further develop mid-career workers.

In its recent report, the Chartered Management Institute has claimed UK organisations lose £84bn in lost productivity due to poor management. The CBI has identified effective management practices as an important factor explaining the substantial variation in productivity that exists between UK firms.


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Poor management is also among the highest contributors to business failure. As a result, there’s significant interest among employers in management-focused apprenticeships. Higher-level apprenticeships are - and increasingly will be - a driver for helping employers address skills needs, getting to the core of the UK’s productivity issues, and encouraging growth. 

The real impact and value from the levy will come at degree and Master's level - filling skills gaps in areas like management, engineering, digital and technology solutions, aerospace software development , and even in finance and banking needed for the shift to industry 4.0 models.

For society more generally, higher-level apprenticeships are also a way of levelling the playing field, opening up access to well-paid managerial roles to people who haven’t necessarily come through traditional academic paths and where there might not be a family history of going to university, let alone of benefiting from postgraduate education.

We’re only one year into the levy. The apprenticeships model needs a period of stability to work itself out and to be embedded. It’s too early for a meaningful assessment of the value of the scheme and, at this stage, the calls for further new reforms look unhelpful. 

Whilst some moves to simplify the system would be eagerly welcomed by all parties, proposed changes that confine apprenticeships to GCSE or A level equivalents should and will be strongly resisted by employers who desperately need higher skills to grow their businesses.

For the UK to thrive, we need apprenticeships that work for everyone.


 

About the author

Professor Lynette Ryals is Pro Vice Chancellor and Director, Cranfield School of Management
 

 

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