2023-07-20 04:00:33
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“Rip-off” university courses are letting young British people down, says Prime Minister Rishi Sunak. He wants to correct the country’s “profoundly wrong . . . cultural bias” once morest vocational training.
Sunak is right to condemn the UK’s snobbery regarding on-the-job training, which can equip young people with useful skills while they earn an income and get to know an employer. In contrast, many students leave university with hefty debts and qualifications they might never use.
Cultural biases once morest apprentices are less common in continental Europe. In Germany, for example, manufacturing apprenticeships have long been held in high regard by employers and staff alike.
But before students rip up their university offers, ministers must also be honest regarding the inadequacies of England’s apprenticeship system.
Sunak wants to cut the number of poor quality university courses. But the apprenticeship sector, too, needs some reform.
Apprenticeships in England are funded by a levy introduced in 2017. This is in effect a payroll tax that requires big employers with an annual salary bill of more than £3mn to pay 0.5 per cent of that total into a fund to spend on government accredited training that lasts from one to five years. If that money has not been used following two years, it is absorbed by the Treasury. For smaller companies that are not subject to the levy, the government meets 95 per cent of training costs.
Because of the Treasury clawback, large employers have an economic incentive to find the most expensive training courses offered by private sector providers and sign up existing employees “as quickly as possible”, said Tom Richmond, founder of the education think-tank EDSK. “That’s the most efficient way to use up your levy contributions.”
As a result, participation has become skewed towards an older age group that is already in work, rather than inexperienced youngsters. Offering training to people of all ages is important but at the moment the balance is wrong.
Between August 2022 and January this year, 195,600 people started apprenticeships in England, according to official figures. Of that number, only 55,580 were under 19.
Completion rates are another problem. In 2021-22, this was slightly more than 53 per cent. A 2022 survey of more than 2,400 apprentices by organisations including the Learning and Work Institute found that lack of support from their employer was a major reason for apprentices quitting.
Then there is the question of quality. There are some very good apprenticeships. Programmes run by companies such as BT and PwC are often held up as a gold standard. But not all schemes are created equal.
An analysis of government data last year found that workplace apprenticeships in England delivered the poorest quality further education, while an EDSK investigation found apprenticeships advertised on the government’s vacancy website that involved low-skilled work that should not require a year’s training. Examples included assisting with a drinks trolley. Employers can pay apprentices a minimum wage that is lower than the national minimum wage. This creates a temptation to turn some jobs into apprenticeships.
Employers also find the levy inflexible. Groups including the British Chambers of Commerce have called for reforms so that shorter training programmes of less than a year qualify for funding. Employers argue that this might help fill gaps in the labour market, if for example shorter software coding courses were eligible for levy funding.
There are some straightforward fixes. A proposal from think-tank Policy Exchange to link qualifying courses to the government’s list of shortage occupations is smart.
The government should abolish the lower minimum wage for apprentices, something the Low Pay Commission, the UK wage advisory body, consulted on this year. That would remove the temptation for employers to badge roles as apprenticeships when they are simply starter jobs.
The Department for Education said under 25-year-olds now account for half of all apprenticeships started and it was promoting them to young people “as a great way of getting into a wide range of rewarding careers”. But ministers should continue to lean on employers to ensure they are taking on school leavers.
The prime minister is rightly concerned that too many young people are “sold a false dream of going to university”. It is up to him to ensure they are not sold a false dream regarding apprenticeships either.
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