Two point seven billion
By Caro Walmsley, November 13, 2018
In April 2018, the apprenticeship and skills minister Anne Milton was quoted in a national newspaper saying:
“Our [apprenticeship] reforms have fundamentally changed apprenticeships for the better.
"It has taken some businesses longer to get going on their apprenticeship programmes using the levy, whilst many that I have met are forging ahead, growing the numbers of apprentices with their businesses getting a skilled and loyal workforce.”
Her use of “some businesses” and “many that I have met” may suggest that most employers had found ways to embrace the levy and apprenticeships. Some six months later though, the facts seem to indicate otherwise.
The apprenticeship levy was introduced to promote the creation of apprenticeship opportunities in a bid to reduce a nationwide skills gap, encourage social mobility, boost productivity and provide improved access to good quality vocational training.
Since April 2017, any employer with an annual salary bill in excess of £3 million is required to pay the levy via an apprenticeship service account (ASA) and any funds unspent after 24 months expire. So, for example, funds entering an ASA in May 2017 will expire in April 2019, unless the employer uses them. By the end of June 2018, just under 14,000 employer ASAs had been created.
The theory appeared sound. A multi-intentioned reform that would see a large number of employers pay a significant amount of money to their ASAs, all neatly wrapped in a 'use it or lose it' incentive. Fail-safe surely?
But in practice?
At the end of September 2018, just 14% of the total levy funds collected had been drawn down, leaving a balance of £2.7 billion unspent. To give £2.7 billion some context, it’s equivalent to the collective salary of 61,000 nurses. It’s transformative spending power. If only it could be spent.
So rather than just “some” tardy businesses lacking the will to “get going”, are there some basic issues of supply and demand to be satisfied if apprenticeships are really going to work for employers, for young people and for wider socio-economic gain? I think so.
If it's problematic to generate a sustained supply of high-quality apprenticeship candidates this will inevitably suppress the appetite to create apprenticeship vacancies. And limited vacancies will reduce the demand for apprenticeship candidates. You can’t solve one side of the equation successfully without resolving the other and quality is key to the solution. No matter whether employers view the levy as a motivational carrot or draconian stick, forced with a choice of use it or lose it, it appears that employers are currently choosing to lose it. But why?
Longer to “get going”?
The levy was announced in 2015 and incorporated into law in 2016. Is more time really the only factor at play here? I don't think so. It's easy to jump on the bandwagon of “it’s not working” or believe that simple tweaks to levy spending regulations will remove some complex hurdles. It's harder though to design ways to address the real issues that are preventing the levy from achieving its intentions.
There are five obvious areas that require reform, revision and resolution if we really are to see widespread adoption of apprenticeships by students, parents, schools, colleges and employers. Whilst the announcement of the levy has started the conversation, three years on we need more than just a dialogue.
More students choose not to go on to university than do. Yet there’s no clear route from school/college to vocational training (as there is from school/college to university). Additionally we lack widespread, strong and effective community-based networks between employers, schools and colleges, which only further obfuscates the vocational pathway for potential apprenticeship candidates.
And the students are not alone. Unless they’ve had prior, direct and recent experience of the apprenticeship pathway, many teachers, careers advisors and parents struggle to successfully navigate this route. Compared to the guided, well-known and established UCAS route the contrast is stark. Equally accessible pathways are required.
Partly because there’s a lack of clear alternatives, there’s a widespread assumption that heading to university after school/college is simply what’s done and is a better route. The UCAS pathway is typically more apparent and better respected because it offers the promise of superior employment opportunities and higher earning potential. But it's a promise doesn’t always deliver.
The Commons education committee recently reported that half of recent graduates were not working in graduate roles in 2017. So surely we should be asking if the assumption that the university pathway is better for all students is accurate. And if it isn’t, then might that be acceptable? It could be, if an alternative pathway to UCAS, one that was as equally accessible and respected, was readily available.
For young people, a wealth of information exists about apprenticeship standards, levels, training, funding and vacancies. Most of it though is difficult to navigate, interpret and understand correctly. It’s often said that if you can’t see it you can’t be it. But if you’ve never heard of (and this is a real apprenticeship standard) a Light Water Reactor Scientist and Engineer you won’t accurately recognise one, even if you’ve just been parachuted into your local nuclear power plant and given ballistic goggles. You can’t choose to be something you haven’t heard of and understood.
Equally, employers can become tangled in in a web of infographics, webinars, articles, whitepapers and FAQs from industry bodies, apprenticeship training providers, business service providers, the DfE and the ESFA.
Most of this content is helpful, but little of it is specifically tailored to the needs of individual organisations. Successfully navigating it so that it may be accurately interpreted to inform early careers strategies is no small feat (or investment).
Less is more and simpler often better, but a means of access to information that is succinct, clear and tailored to individuals needs and requirements is optimal.
Can we reasonably expect school or college leavers to have lengthy CVs detailing a wealth of prior relevant work experience? For apprenticeship recruitment to successfully source, acquire and retain brilliant candidates then the means of identifying and selecting potential employees needs consideration.
Application routes and recruitment processes for apprenticeship candidates, particularly in large organisations, often echo graduate routes and processes. The two should be quite different in order to produce optimal results. Routing one type of life experience down a path designed for another type of life experience, even if both share the same ambition, may not create an optimal selection field.
Recruiting is a two-way street though, and many employers recount experiences of potential apprenticeship candidates who weren’t sufficiently motivated by or aware of what the role they were applying for required.
Meeting eligibility criteria is not enough. Potential candidates need to develop the ability to demonstrate their understanding of the requirements of the role and the mission and values of the potential employer.
Speed to competency
Direct entry apprentices are not always properly equipped to enter the workforce and can lack basic entry level professional communication, awareness and interpersonal skills. This makes them less attractive to potential employers, which develops a catch-22 situation because where else can they learn these skills but the workplace?
It’s not a training and development burden that employers should bear the sole responsibility for though. We need to ensure that young people are leaving schools and colleges with both qualifications and basic professional skills, particularly if they’re opting to choose a pathway that isn’t headed straight to university. If their pathway is directed towards vocational learning, then professional skills training should form a natural part of that route’s plan.
Making demonstrable progress in each of these five areas is what would truly “fundamentally change apprenticeships for the better”. We’d be happy to share our action plans with the Rt Hon Anne Milton in an effort to move the conversation beyond a conversation. Talk is usually cheap, but in this case it’s got a £2.7 billion price tag. It’s time to act.