The Apprenticeship Levy Effect
By Xuan Hoang
Some time ago, university was hailed as the gateway to a better career, more equal society and stronger economy. In an attempt to get more people through the doors, there was a surge in university numbers, and all young people were directed towards the same academic path.
But as the churns of graduates were released into the world, the government awoke to the realisation that there were too many university courses that were not providing students with the skills needed to get a job. Young futures were displaced, and the economy lost out on much needed skilled workers.
So, came a renewed government effort to increase apprenticeships. The ambition to rise from 500,000 to 3 million apprenticeships by 2020 was almost inevitably blighted with some sort of failure. If we were to learn anything from the university boosting strategy, it’s that quantity can be a detriment to quality. The target was an immense number plucked from the sky, and the Apprenticeship Levy was the paper plane to reach it.
The Levy requires businesses with a wage bill of over £3m to pay 0.5% of their payroll into a training fund. Over a year on from its launch, and apprenticeships have plummeted 59%. In any light, that’s disappointing. There’s a lot to be said about a strategy that achieves the absolute opposite of its ambition. But falling off target isn’t the crux of the matter; the effect the Levy has had on reputation and quality of apprenticeships is.
As employers scramble to meet the rigid demands of the Levy, we see apprenticeship quality diminish. Almost 40% of government-approved ‘apprenticeships’ fail to meet the international or traditional definition. Among them are low skilled and often very short courses that offer minimal training. These include serving food and drink, basic office administration and working on a reception desk – not quite the precious work skills we were promised.
And rebadging existing roles isn’t just limited to the lower end of the scale. More advanced, higher-quality schemes have increased by 400%, which at first glance looks positive, but within that number lies another story. Employers are shifting the costs of their existing training onto the government to fund leadership and management apprenticeships. Some of the most popular apprenticeships include becoming a Team Leader, Supervisor or Manager. It’s a cost to the government that prioritises more experienced workers, and does little in improving recruitment or training young people.
It’s clear that the Levy needs rethinking. Amid the chaos, we’ve seen the purpose of apprenticeships quickly warp as they’ve become a burden on employers, and the Levy become just another tax – some unintended consequences of a large scale government attempt to solve complex problems with a blunt instrument. But by focusing on this giant tool of economic performance, we mustn’t lose sight of the founding purpose of apprenticeships: to give opportunities to those starting on a career path to learn skills outside of academia.