Crisis in Apprenticeships

Crisis in Apprenticeships

Whilst people have been distracted by what Brexit may or may not mean for business there has been a disastrous development which could have long term consequences for the economy, both locally and nationally.

The numbers of young people beginning apprenticeships has fallen sharply across the country in the last year – down by a staggering 40% to just 160,000. For example, in November 2017, there were 27,000 apprenticeships begun compared to nearly 42,000 the year before.

This situation has coincided with the introduction of the Apprenticeship Levy, which is paid by companies with a wage bill of more than £3m. The idea was that they would claim the money back by employing apprentices.

But that doesn’t seem to have happened. There is worrying evidence from a survey of 1400 companies taken in September 2017 which found that nearly a quarter of those paying the levy didn’t understand it and had virtually no sense of how their company would respond to it, More than half of respondents viewed it as just an additional tax.

Many companies have apparently just rebadged their existing training activity in order to claim back their allowance, and some say they will be more likely to offer apprenticeships to existing employees instead of new recruits.

All this is very bad news indeed for the economy. We were getting to a situation where apprenticeships were no longer being seen as second class, linked to images of people in greasy overalls.

Instead, their reputation was improving all the time, to the point where they were being seen as a very respectable way of getting into work and more young people were opting for that route instead of taking a degree. Indeed the higher level apprenticeship scheme was allowing people a different path into the likes of the law and accountancy. Big companies were attracted by the idea of finding talented non graduates who could not only learn their craft but also take on the culture of their employer.

The fact that this process seems to be stalling is deeply concerning. We run the risk of missing out on energetic and enthusiastic employees who will make a great contribution to their own companies but also the economy as a whole. This is an issue deserving of a higher profile and employers need to address it before it leads to an unstoppable decline in a valuable element of the workforce.