Apprenticeship levy: 8 potential pitfalls but it's a game changer

No one predicted the apprenticeship levy in the budget, the Conservatives out-manoeuvred Labour by legislating for a levy on large employers. The truth is that Tristram Hunt was Labour’s Achille’s heel. He knows nothing about vocational learning, just another public schoolboy and academic, dislocated from the reality of the majority of young people, who do NOT go to University. I’m not speculating here. I spoke to him personally on this issue before the election – he was clueless. The truth is that this is a productivity issue, alongside the recognition that the academic route is not for everyone and that the strongest European economies have adopted this models. Tom Wilson, the Director of Unionlearn, called it a game changer. It is. But there are potential pitfalls.

1. Feed from schools

There’s some irony in the fact that Alison Wolf, who recommended this policy, was also responsible for abolishing a huge tranche of vocational learning in schools. With a succession of Labour and Conservative Education Ministers hostile to vocational learning in schools, the EBacc has all but led to its disappearance. We can insist on academic qualifications for entry into apprenticeships but this will be a hindrance for many, not a help, especially in Maths. The solution is a functional maths alternative.

2. Quality control

Apprenticeships are not trivial. They demand quality control. There’s background theory and knowledge, actual practice in the workplace, as well as attitudinal and pastoral issues. In many ways it’s more complex than degrees. Additionally, they’re sector specific. We’ve had the trailblazers in some sectors, which act as exemplars but there’s much more work to be done. The important thing is to stick with it and not get too critical too early. Mistakes will be made but we owe it to young people to get this right. An apprenticeship needs to be structured with good support for students. These are young people who need guidance and support, not treated as cheap labour. We need the best of employer training and practice, as well as strong educational components. There has to be adequate regulation, namely an overseeing body, to keep everyone honest.

4. Brand through accreditation

Credible accreditation matters in terms of employer, parent and student acceptance. We need to create a credible currency, whether its independent accreditation bodies, such as City & Guilds, educational institutions or employer accreditation. It’s a matter of building the brand to sustain effort into the future. This is all about seeing apprenticeships as a viable alternative.

5. Money matters

The levy levels the playing field. If you don’t have apprenticeships, you either do them, or pay, so that there are opportunities for others. It will be interesting to see whether this will be linked to revenue, profits or payroll. We don’t how much the levy will be or how it is to be collected (suggestion is 0.5% of payroll: £2 billion). It has to be high enough to pay for the 3 million apprenticeships promised by 2020, without the Conservatives resorting to statistical jiggery-pokery, to get to that figure. 3 million apprenticeships over 5 years needs a lot of money – billions (plural) not millions.

6. SMEs

One immediate problem is the large company focus. Our economy is also driven by small and medium sized companies. One would hope that opportunities are also available in this context. This is not easy but selected criteria, around high growth, high productivity sectors, may allow some of these to participate. The public sector also has to respond.

7. Technology support

There is a real opportunity to use technology to manage apprentices, who are in many different locations. This is not just tracking but supporting them and spotting potential drop-out. There’s also an opportunity to get scale on the delivery of content. This is not blue-sky, as it’s already been implemented in pools of excellence. To ignore technology is to ignore the present.  The point is not to recreate the apprenticeships of the past but those of the future.

8. England only

This is employer-led but as the levy only applies in England, and many large companies operate across the UK in Scotland, Wales and Northern Ireland, how will those countries respond. It could lead to a drain of apprenticeship activity towards England. It would be great to think that these countries would adopt this policy but they won’t. Interesting tensions here.

Conclusion

I welcome this policy. The idea that forcing everyone into HE is the route to higher productivity is patently false. Our productivity has stagnated in the face of substantial increases in HE student numbers and graduates. We have ignored the majority of young people for decades, leaving them to an underfunded FE system, a truly awful career’s service and the vagaries of the market.

There’s no real problem with the idea of apprenticeships. My nephew and his parents were delighted when he got one in a large company in Scotland. The problem was that he was only one of three, from 588 applicants. The demand is huge, the supply pitiful. Where there’s market failure on this scale, the government has an important role to play. We need to grab this opportunity, shape it and not get bogged down in petty carping. The left must see this as an opportunity and not a form of cheap labour or, as New Labour did, as non-aspirational. The right must not play games and do this on the cheap, with holes that allow employers to exploit the system. Evidence from abroad shows that it needs co-operation between employers, government, training providers, accreditation bodies and unions. So come on CBI, don’t be such a bunch of stupid sceptics. There’s a lot of good people who want to make this work.