Don’t break England’s apprenticeship system with misguided fixes

Ten years ago, apprenticeships did not bear much on English higher education. Universities would employ a few young people as apprentices, and occasionally an apprentice would challenge admissions staff by applying to a degree programme. But that was more or less that.

Today, over 100 higher education institutions are approved to deliver apprenticeships in England. As of November, 29 universities had over 500 people undertaking higher level apprenticeships, eight had more than 1,000 and there are smaller universities where apprentices will soon equate to a quarter of their annual student intake.

Universities are also significant payers of the apprenticeship levy, which is compulsory for all employers with an annual payroll of more than £3 million. The current debate on the future of that levy is, accordingly, of significant importance to higher education.

The press has focused on the problems of the new system. Employers are finding the levy bureaucratic and cannot spend their levy payments. There is not enough apprenticeship funding for the smaller employers who don’t pay the levy, and the number of apprenticeship starters at level 2 (GCSE equivalent) has crashed.

Amid these concerns, the Conservative Party rightly committed in its election manifesto to review the levy’s operation. Given the forecast overspend of the levy pot (£1.5 billion by 2021-22) it is a safe bet that Treasury officials are looking hard at the options.

A fair few suggestions have been trailed in the press and in thinktank reports. These include restricting employer spend on apprenticeships at higher education level, or for apprentices over the age of 24, or for those who earn above a certain salary. All of these options would, of course, fundamentally undermine the premise that employers are in the best position to choose where to use apprenticeships to raise their performance. They would also have a significant detrimental impact on the market for higher and degree apprenticeships.

I would not argue that everything is currently right with apprenticeships, but we are in danger of not recognising what has and will be achieved with them. Apprenticeships are no longer seen as a good choice only for other people’s children. They are enhancing the delivery of key public sector services. Police forces are using the police constable degree apprenticeship to drive innovation in professional practice and to attract officers from diverse groups. The NHS will increasingly use apprenticeships to train new and existing employees in a key range of occupations, such as dietitians, district nurses, midwives, nursing associates, paramedics and physiotherapists. Local authorities will use degree apprenticeships to train new social workers.

The development of apprenticeships at levels 2 to 7 (master’s level) also provides an opportunity to develop genuine new work-based progression routes to other professions and higher-level occupations (unlike some previous programmes, whose participants trod water educationally and failed to progress their careers). Employers are using apprenticeships to tackle shortages of architects, managers, ecologists, civil engineers, cybersecurity professionals and artificial intelligence data specialists. There are considerable opportunities to link apprenticeship provision to local priorities, new industries and the climate change agenda, and to use apprenticeship to transform “left behind” regions.

The problems actually arise from this success. Levy-paying employers are spending more of their levy than forecast and on the higher-quality programmes that better meet their needs but cost more to deliver than the apprenticeships of the past.

What is the solution? First, we should recognise that apprenticeship is, first and foremost, an employer-led productivity programme. This means that apprenticeships for 16- to 18-year-olds, which are in essence compulsory education, should be funded not by the levy but, rather, through the education budget.

Second, we should re-examine the operation of the levy. Public sector employers are disproportionately the biggest payers. Their underspend – along with that of large private sector employers – is supposed to fund apprenticeship for smaller, non-paying employers. But most observers would agree that the NHS, the biggest levy payer by far, should be free to use its levy payments to train the nurses and healthcare staff it needs, rather than introducing restrictions in order to provide a 95 per cent subsidy for small private businesses to use apprenticeships to train their own employees.

The levy paid by the public sector should be ring-fenced for the public sector, and we support calls for a separate government budget, over and above funds generated from the levy, for small businesses.

Moreover, the government should revisit that 95 per cent subsidy, which seems extremely generous. After all, part of the rationale for the levy was that employers were not spending enough on training and developing their staff. Perhaps SME employers should be required to pay more. Perhaps the government could make a higher contribution for apprenticeships linked to its industrial strategy priorities or that have a greater impact on social mobility. At higher levels, for non-levy apprenticeship provision, the relative contribution of the state, employer and individual should be revisited.

English apprenticeships are an educational and productivity success story. Some changes are definitely needed, but the government must base them on evidence, implement them gradually and make sure they enhance rather than undermine what has already been achieved.

Jane Longmore is chair of the University Vocational Awards Council (UVAC), representing more than 90 higher education institutions. She is vice-chancellor of the University of Chichester.