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Apprenticeships 2018

Apprentices are back in business but does the system need review?


Neil Carberry

Director of People and Infrastructure, Confederation of British Industry

Businesses have renewed faith in developing highly-qualified talent through apprenticeships, and the right changes will help more firms to get involved.

The Apprenticeship Levy requires all employers with an annual wage bill of £3m or more to pay 0.5 per cent of their staff costs into a fund, which is then topped up by the government.

For many, this requires reform. Carberry calls for greater flexibility in its application if it will boost national apprenticeship rates, deliver quality skills training and create the ‘multiplier effect’ as hoped. Although there are concerns for the structural design of the Levy, the opportunity for apprenticeships as a means to grow the country’s skills base and create a highly-skilled, highly dedicated workforce is one businesses are enthusiastic to be a part of.

The nineties were all about higher education

“For a while, in the nineties, it was all about higher education, but what we have seen in the past few years is a real return to apprenticeships as a route to skilled employment,” says Carberry. “They service one of the areas of the labour market where shortages are most tight; where we have very high employment rates and where apprenticeships can create a great route for young people to access a skilled career.”

With higher-apprentices now earning £150,000 more over their lifetime and over 90 percent of all apprentices going into further work or training, there are clear benefits – both financially and for career progression – at all levels of apprenticeship. An apprenticeship is not just for traditional school/college leavers but also provides opportunity for experienced employees. “An apprenticeship is a formal training programme. It’s a real opportunity for all people to up-skill, including formal re-training,” says Carberry.

Filling specific skills gaps

Employers are looking at apprenticeships in innovative and exciting ways to develop talent pipelines for specific skills gaps within businesses and industry, to produce a highly-talented and dedicated employees. “Over the past five years, businesses have been engaging with the education sector to develop new apprenticeship standards at the higher skills level. These have been designed by employers so they match the needs of the labour market. Young people can expect a much more rigorous and effective curriculum for apprenticeships now,” says Carberry.

Yet, despite growing appetite and new opportunities to upskill the workforce, skills gaps have been found to be the single most prominent worry facing firms, with nearly four in five (79 per cent) of respondents highlighting this as a concern*. The growing anxiety around the availability of an appropriately-skilled workforce could be eased through readily-accessible apprenticeship schemes. However, the Apprenticeship Levy’s current inflexibility restricts opportunity according to Carberry.

“What business want is a stable, national system, that gives enough flexibility for them to work with colleges and other providers to deliver real, local leadership,” says Carberry. “The ability to work together and pool their Levy either by sector or local area will help get more companies involved – in particular, smaller firms. You will achieve a much more sustainable reform.”

With businesses’ concern for the future skillset of the UK labour force on the rise, the need for accessible, high-quality apprenticeships is increasing. Just as these businesses are looking to develop the right skillsets to match the market, calls are growing for the government to find the right sytem too.

*According to the CBI/Pearson Education and Skills Survey 2017

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