Apprenticeship levy and targets will fail to solve skills shortage

The Government’s flagship apprenticeships policies, including the apprenticeship levy that comes into force next week, lack focus and will not fill widening skills gaps, MPs have concluded.

The Sub-Committee on Education, Skills and the Economy found that the apprenticeship levy and the target of three million apprenticeship “starts” by 2020 are “blunt instruments” that risk being unduly focused on simply increasing participation.

Committee chair Neil Carmichael said: “We must train our young people for jobs that the economy needs, but the Government has failed to show how its three million target and levy will help achieve this.

“Ministers must recognise that apprenticeships are a means to an end and not an end in themselves. They need to place greater emphasis on outcomes, focusing on areas of the economy where training is most needed and ensuring quantity does not trump quality.

The committee said that the success of apprenticeships should be judged by whether individual apprentices secure employment. Ministers should also look into restructuring the apprenticeship levy by sector or by region, and ensure that targets do not hamper attempts to improve quality.

“For too long apprenticeships have been seen as inferior to the university route and failed to benefit young people from disadvantaged backgrounds,” added Carmichael. “We fully support the Government’s attempts to improve the prestige of apprenticeships, but it will take more than words to achieve this aim. If the quality is there the prestige will follow.”

Last week Unite raised concerns about the quality of apprenticeships after Subway advertised for an “apprentice sandwich artist”, to be paid £3.40 per hour, the apprentice rate of the national minimum wage.

Unite acting general secretary Gail Cartmail, said: “The Government is serving up a ‘curate’s egg’. On the one hand, they will be pointing to the improved quality of apprentices by highlighting the new standards regime. On the other, they will be trying to meet their three million target relying on apprentices following the discredited framework system.

“We have consistently argued against scores on doors and believe the Government should be primarily concerned with quality and meeting the actual needs of different industrial sectors.

“If unscrupulous employers are subverting the apprenticeship system in any way, they need to be named and shamed. Apprenticeships need to be a gold standard providing skills for life and not degraded and used as a way of acquiring cheap labour.”

The MPs’ report highlighted tension between the Government’s desire to give employers more control over the system and its attempts to use apprenticeships to increase social mobility, and it warned that schools still fail to promote non-university routes.

A survey by the UK Commission for Employment and Skills found 209,500 reported skilled vacancies, a 43% rise on 2013. This is despite apprenticeship “starts” increasing to 509,400 in 2015-16, according to official figures, although only 67% of apprenticeships were completed.

The MPs called for an annual report on skills shortages on a national, regional and sector-specific basis and for Ofqual to have a greater role in regulating assessments.

The report welcomes the creation of the Institute for Apprenticeships, which it expects will play a major role in improving quality in the future. However, it cautions that the new body must be given sufficient capacity and independence if it is to succeed.

It also calls for more support for apprentices themselves, which could include changes to the benefits system, more subsidised fares on public transport or even direct financial support such as bursaries.

Co-chair Iain Wright said: “Ministers have a centrally-dictated, top-down three million target… at the same time as insisting that this approach will be bottom-up and address the skills requirements of individual firms, sectors and regional economies.

“These requirements will often be very different and the Government should target those sectors of the economy and regions of the country where skills shortages are particularly acute.”

Unite also said it believed that major companies should undertake “overtraining” – training more apprentices than required – in order to ensure there are sufficiently highly skilled trainees for supply chains.