Apprenticeships, apprenticeships, apprenticeships
My view on apprenticeships is simple: they are an amazingly effective way for people get the skills they need.
The reason I said earlier that the Apprenticeship Levy (a 0.5% tax on employers with a payroll over £3 million) is a glimmer of hope, is that it has doubled government funding for apprenticeships since 2010.iv Alongside the Levy, the quality of apprenticeship training has dramatically risen; employers are now involved in designing the content of apprenticeships, it stacks up against the real world; and there is a guarantee that at least 20% of an apprentice’s 30-hour week will be high quality training, not just work. That’s not to say the system is perfect, but it’s undeniable that the Institute for Apprenticeships has led a transformation in apprenticeships.
UCAS figures show this transformation has had a real impact on applications. 40% of people who come to us for careers advice and information are interested in apprenticeships – an increase of over quarter of a million since 2021. That’s a meteoric cultural change, and one I think will grow and grow – our current forecast is that at least 500,000 students will be interested in apprenticeships in 2030.
For that to happen, the number of apprenticeships on offer will need to grow dramatically. Currently, the Levy ringfences around £3 billion a year for apprenticeships, but this is nowhere near enough to meet demand.v To put it in context, UCAS represents the largest repository of apprenticeship vacancies in the UK and, on results day last year, we had just five thousand apprenticeship opportunities live. Against the hundreds of thousands that were interested, current numbers are not going to cut the mustard.
The 0.5% Levy will therefore either need to increase, or we will have to drive up employer expenditure on apprenticeships another way. My personal preference would be for a Skills Tax Credit ‘super deduction’ as already exists for Research and Development.vi It would see employers reducing their taxes for every pound they invest in high quality apprenticeships or T Level placements (in addition to the Levy). This could be extended to other vocational and technical qualifications where quality is high.
Growing the number of apprenticeships would also help address the problem identified in the Sutton Trust’s research that twice as many degree apprentices come from wealthy backgrounds.vii Ensuring apprenticeships continue to be a driver of social justice, rather than exclusive or rare opportunities, will be critical as demand continues to rise.
A generous Skills Tax Credit would drive up applicant numbers, regardless of demographics and give the millions in work the change to retrain or upskill. It would also ensure there are enough opportunities for the 50% of young people who don’t go on to higher education, bolstering the 2030 one million forecast dramatically.viii