On Friday (21 August) Prime Minister David Cameron outlined the Government plans to increase the number of quality apprenticeships across England and give businesses a say on how they are run and what they offer.
Employers across the country will be asked for their views on the introduction of an apprenticeship levy set to be introduced in 2017 and designed to increase investment in training and apprenticeships.
Other steps include a requirement to take a company’s apprenticeship offer into account when awarding large government contracts and publishing new ‘industry standards’ so that apprentices have the skills that companies need.
Transport Secretary Patrick McLoughlin also announced his ambition to boost apprenticeships across the road and rail industry, pledging 30,000 apprenticeship places in the sector during the lifetime of this Parliament, with help from a transport strategy led by Terry Morgan, Chairman of Crossrail, building on the 2.3 million apprenticeships created under the last Parliament to make sure that young people have the skills and expertise that employers demand.
“The greatest asset any employer has is their workforce, said the Prime Minister, “And by investing in them, they are investing in the success and future of their business.”
“As a one nation government, we are committed to supporting 3 million quality apprenticeships over the next 5 years – to help strengthen our economy, deliver the skills that employers need and give millions more hardworking people financial security and a brighter future.”
The amount that UK businesses have invested in training has fallen consistently over the last 20 years and UK productivity now lags behind other major Organisation for Economic Co-operation and Development (OECD) countries.
Employers are now being urged to give their views on plans for an apprenticeship levy to boost investment in apprentices and skills training and make sure it meets their needs. Under the proposed approach employers who put in funds will have direct spending power over it.
Levy systems already operate in over 50 countries, including Netherlands, Denmark and South Korea, and are designed to ensure every larger company plays their part in investing in the future generation of apprenticeships. The levy is intended to help cement the government’s aim to build a world class apprenticeship system, led by employers. A consultation process with employers is now underway.
Professor Alison Wolf, Director of Public Services Policy and Management at Kings College, believes the levy is a positive step, saying “This country once had, and then lost, an excellent apprenticeship system. I am delighted that the government is introducing a levy. In my view, this is a necessary step towards recreating high quality apprenticeships across the country, based on the needs of our economy, engaging and responding to employers, and able to contribute to current and future productivity in an effective way.”
Major changes to government procurement
From 1 September 2015, all bids for government contracts worth more than £10 million must demonstrate a clear commitment to apprenticeships. In particular, employers’ bids will be reviewed in line with best practice for the number of apprentices that they expect to support. The move is aimed at widening the scope of businesses offering apprenticeships, and with more than £50 billion a year spent on government procurement contracts, will provide a significant boost in apprenticeship numbers.
‘Industry standards’ for quality apprenticeships
In the latest of a series of steps to drive up the quality of apprenticeships, 59 new apprenticeship standards developed by Trailblazer groups of employers and businesses have been approved and were a part of the Government announcement.
The ‘industry standards’, which cover a range of professions including nuclear engineers, fashion assistants, live event technicians, personal trainers and welders will outline the skills apprentices in these roles are expected to have to meet the needs of employers – all part of government’s commitment to see through the reforms that they hope will build a world class apprenticeship system.
Responding to Friday’s announcement by the Prime Minister, Ben Willmott, head of public policy at the CIPD, spoke positively of the plans, but warned that the focus on the number of apprenticeships could be dangerous.
“It’s important that the introduction of an apprenticeship levy is used to focus on increasing the quality of apprenticeships and not just the numbers, which means that this investment by large employers should largely be reserved for the creation of more Level 3 and above apprenticeships,” said Wilmott, “The CIPD’s research on graduate over qualification published this week showed the high proportion of UK graduates in non-graduate jobs, emphasising the importance of developing more high quality vocational routes into the labour market – a high quality apprenticeship system is central to achieving this.
“The Government has also rightly highlighted its concern about falling investment in training over the last 20 years and while increased investment in apprenticeships is welcome, it is not a panacea in itself. We need to understand the broader factors that will boost training investment and productivity and ensure that people skills are utilised more effectively in the workplace, including crucially, investment by employers in their leadership and management capability.”
Wilmott’s comments were echoed by John Longworth, Director General at the British Chambers of Commerce, who said, “It is right that the Government is seeking to engage businesses and consult on the introduction of an apprenticeship levy to make sure this policy is properly thought-through.”
“Apprenticeship schemes can play a part in meeting important ambitions to boost skills and drive-up productivity. But for apprenticeships to take hold and become established, the focus should be on quality – not hitting an arbitrary figure. The conveyor belt model is not what business wants to see.
Many corporate leaders have come out in full support of the government proposals, including Nigel Whitehead, Group Managing Director of programmes and support at BAE Systems. “As one of the largest employers of apprentices in the UK, we welcome the government’s continued commitment to encourage quality apprenticeships,” said Whitehead, “We recognise the valuable contribution that apprentices make to our business, reflected by the fact that we will recruit more than 800 apprentices this year, including those we train for SMEs and companies in our supply chain. We value the opportunity to work with government to help design and implement the apprenticeship levy”
However, John Longworth feels more should be done to involve smaller organisations. “BCC research shows that greater engagement with smaller businesses is needed to increase apprenticeship take-up. Government policy is currently too focused on major employers, but equal effort ought to be put on encouraging and supporting smaller businesses to offer apprenticeships.”
James Marsh is an HR consultant and currently leads the editorial team at HRreview.
An avid HR blogger and tweeter on HR and management issues, James has worked as an HR manager, consultant, in-house recruiter and trainer and has expertise in both management strategy and HR policies and processes. He has a BA from the University of Nottingham in American Studies, a Masters in Human Resource Management from the University of Westminster and is a member of the Chartered Institute of Personnel and Development (CIPD).
James is also the regular chairperson of HRreview's series of webinars that discuss and debate the latest HR trends and issues, InsideHR.