Today the Apprenticeship Levy comes into effect, a policy with the potential to transform apprenticeship provision in the UK. The government hopes the levy, alongside its target of 3 million new apprenticeship starts by 2020, will give the country’s vocational education system the boost it needs to tackle the country’s widely recognised technical skills shortages and generate inclusive economic growth.
However, both the Levy and the target have proved to be controversial. Many have rightly observed that the government’s pursuit of quantity when it comes to apprenticeships puts at risk the quality of such schemes. A further challenge for apprenticeship policy in filling the country’s skills shortages is one of coordination: how can policymakers ensure that the 3 million new apprenticeships starts are actually in areas and occupations where they are needed?
To this end, the Centre for Progressive Capitalism has been working with a number of LEPs to shed light on the skills mismatches that exist in their local economies. One occupation for which significant under provision is common is electricians. In one LEP, analysis revealed that there were nearly 3,000 more job vacancies for electricians in 2015/16 than there were relevant FE course completions. Clearly, in cases such as these, apprenticeships would be well placed to counteract the undersupply of FE courses. However, there were just 130 electrician apprenticeship completions in the LEP over the same period. The evidence suggests that across a number of LEPs, apprenticeships could do more to plug the gaps left by FE courses.
Chart 1: Job vacancies and course completions for occupations for occupations with under-provision of training 2015/16
In addition, apprenticeship completions are strong in occupations where there is little evidence of FE course undersupply. In the same LEP, there were 440 apprenticeships completed for hairdressers and barbers roles, for which there were already as many as 400 more FE course completions than job vacancies.
Chart 2: Job vacancies and course completions for occupations for occupations with overprovision of training 2015/16
In fact, analysis by the Centre indicates that an estimated 29% of all technical apprenticeships completed in the LEP in 2015/16 were in occupation groups that were already experiencing an oversupply of FE courses relative to vacancies.
Could the introduction of the apprenticeship levy be about to make things worse? Employers looking to recoup their levy payment could offer apprenticeships in areas that aren’t suffering from skills shortages, or simply rebrand current roles or existing training. One Subway branch’s attempts to evade minimum wage laws by hiring ‘Apprentice Sandwich Artists’ should serve as a warning of what the apprenticeship scheme could be reduced to in the future.
It’s hard to imagine how more sandwich apprenticeships will help Britain combat its chronic technical skills shortages. More focus is needed on shifting apprenticeships to occupations where technical skills are sorely needed. Embedded in local economies, LEPs are well placed to lead this. But to do so requires detailed data on the skills needs of local employers.
If properly coordinated, quality apprenticeships can provide businesses with the skills they desperately need, and young people with the secure, well-paying jobs they deserve. Yet if the focus remains solely on quantity, these policies risk merely exacerbating existing imbalances, and a key opportunity for inclusive growth will be lost.
Andy Norman is a Skills Analyst at the Centre for Progressive Capitalism. For more information about the Centre’s skills mismatch analysis, please email email@example.com