First published in The Financial Times, 27 June 2020:
Though the announcement about British pubs reopening has grabbed attention, far more exciting is the prime minister’s statement this month that he would offer an apprenticeship guarantee to every young person. In principle, this is pretty radical — it is a policy I have campaigned for. But what does an apprenticeship guarantee mean in practice? It could be guaranteed funding for all employers who want to offer an apprenticeship. Or, just offering an apprenticeship to a young person if there is one available. The answer is something much more ambitious. We are recasting our priorities to place apprenticeships at the centre of the UK’s skills policy — to create a new culture, making apprenticeships the lifeblood of our training and employment system. Why is an apprenticeship guarantee important? Even before coronavirus hit, our country faced a significant skills deficit, as the Edge Foundation’s skills shortage bulletins show; and the fourth industrial revolution was already transforming many areas of employment. Figures from the Office for National Statistics indicate that 1.5m jobs in England are threatened by automation and young people’s livelihoods are at the greatest risk. According to one study by PwC, 28 per cent of jobs taken by 16 to 24-year-olds could be automated by the 2030s. In the aftermath of the pandemic, there will be a sharp rise in unemployment. The Resolution Foundation estimates that an additional 640,000 young people will be out of work by the end of this year, taking total youth employment levels above 1m. The Social Mobility Commission’s latest report showed that apprenticeship starts have fallen significantly in recent years. This decline is much higher among disadvantaged young people, with a 36 per cent drop in uptake between 2016/17 and 2017/18. An additional 640,000 young people will be out of work by the end of this year Done properly, an apprenticeship allows young people to earn while they learn; they don’t take on student debt; they climb the ladder of opportunity — meeting the UK’s skills needs at the same time. Close to 90 per cent of apprentices who complete their qualification go on to work with their employers or stay in education. So, what needs to be done to boost apprenticeships? First, the government should use the existing levy on employers in a strategic way to close the skills deficit. This means refocusing the levy pot so that it is primarily used on apprenticeships for 16- to 24-year-olds, those from disadvantaged backgrounds and for degree apprenticeships (not middle-management MBA apprenticeships, but ones that ensure our workforce is equipped for the future). The public sector should lead the way, with a much higher apprenticeship target than the existing requirement for 2.3 per cent of staff to be apprentices every year. Where possible, all new recruits to the public sector should be offered an apprenticeship. On public sector procurement, there should be greater hurdles for companies to jump in terms of the number of apprentices that company must employ. We should redirect the £3bn National Skills Fund promised in the Conservative manifesto towards the cost of funding the training of apprentices for non-levy payers. Alongside this, a wage subsidy for small and medium businesses — be that paying wages for the first year, or a lump sum upfront. The government also needs to support smaller businesses by sweeping away the cobwebs of bureaucracy that surround the apprenticeship programme. Relax some of the rules, or look to international examples to reduce risk and handle the paperwork for small organisations. Degree apprenticeships are ripe for a huge expansion. Over the next decade, universities should work towards 50 per cent of their students undertaking degree-level apprenticeships. They can do this by, again, using the levy pot and wage subsidies. The more-than-£800m spent by universities and the Office for Students on access and participation should be allocated to universities that grow their degree apprentice student numbers. The Degree Apprenticeship Development Fund needs to be rebooted to help as a broker between universities and businesses. Reaching a target of having half of all first degrees be apprenticeships may seem unlikely, but if the recent upwards trend continues at the same rate — with some serious policy encouragement — it could take as little as ten years. Meanwhile, the UK’s overseas aid budget currently funds the International Citizenship Service — a volunteering body for 18 to 25-year-olds in international development projects. Why not use a significant chunk of aid money to transform the existing ICS into an Apprenticeship Service Overseas? These apprentices — working with civil society and businesses — would help the developing world and develop their skills at the same time, earning an apprenticeship standard in overseas aid. In September 1999, Tony Blair set a target of 50 per cent of young people to attend university. Twenty years later this target was reached. One can debate whether this was the right or wrong goal but the fact is, it showed that with unstinting determination, large-scale ambitions can be met. As Boris Johnson, the current prime minister, might suggest, there will be “doomsters” that say an apprenticeship guarantee is never going to happen. At best, they will urge a much more incremental approach; at worst, it will be “computer says no”. I prefer the attitude of Sir Nicholas Winton, the banker who saved children from the Nazis. He said: “If it’s not impossible, there must be a way to do it.”
