Last week, the government signalled that it was 'full steam ahead' on its reforms to the apprenticeship system. These include introducing a 'levy' on big business to pay for more apprenticeships, and giving employers more power to set their content and standards.
This focus on apprenticeships is welcome. It has never been more important for the UK to consider how to fill skills gaps resulting from Brexit, whilst ensuring that there are enough good jobs for young people moving from education to work.
But will the new apprenticeship system deliver? There are certainly some grounds for optimism. The decision to raise money from big business to help fund more apprenticeships could provide a much-needed injection of cash into the system, and the decision to incentivise more degree-level apprenticeships could help people to progress in higher skilled jobs. However, a new report from IPPR raises three concerns that need to be addressed.
First, there is a danger that some employers, especially large employers with a 'low-skill, low-pay' business model, could rebadge much of their existing staff training as an apprenticeship, in order to recoup money through the levy. This increases the risk of more high-volume, low-quality apprenticeships of the kind seen before a major reform of the system in 2012.
Back then some apprenticeships run by major supermarkets lasted only six weeks, and most apprentices were existing adult staff. This is a far cry from the sort of apprenticeships seen in successful economies like Germany, where young people spend years learning a trade or craft while studying part-time in college. Without proper regulation, there is a danger that this situation could be repeated.
Second, the new standards, which are set by employers and signed off by government, don't have to include an explicit qualification. Degree apprenticeships will be a great option for young people, but the current bulk of apprenticeships being delivered are at level 2 or 3.
Young people in particular, need to be able to progress into different sectors or different jobs, taking transferable skills and qualifications with them. If many young people are pushed towards level 2 apprenticeships, with no qualifications, it is not clear that the new apprenticeship system will enable any progression.
The delivery of apprenticeships by training providers has previously been a major issue for quality, but significant progress has been made here. In the past we have seen unscrupulous individuals to set themselves up as training providers, who could deliver poor quality training to employees who already had the requisite skills, and then claim the funding when the employees passed their apprenticeships. One of these, Elmfield Training (now closed), made a pre-tax profit of £12.3m in 2011 and over six years received £100m of public money .
The announcement that there will be a new Register of Apprenticeship Training Providers, regulated by the Skills Funding Agency, is a welcome step in making sure the training providers delivering apprenticeships are of high quality.
Of course, the success of the new apprenticeship system will also depend on how employers respond. We are likely to see very different approaches depending on the sector of the economy and the type of employers that are involved. Some sectors, with strong professional bodies, have taken the opportunity of the levy to develop high quality, high status apprenticeships with clear progression routes. There will however be employers who rely on low skill and low pay business models who will be reluctant to spend the time and effort designing and delivering apprenticeships. As IPPR's research shows, there is already a wide variety in the quality of approved apprenticeship standards.
To ensure the quality of apprenticeships, the new standards should explicitly include a qualification, and be more tightly regulated by the new Institute of Apprenticeships, particularly focusing on level, progression and overlap.