The great training robbery: assessing the first year of the apprenticeship levy

13 April 2018

When you hear the word ‘apprenticeship’, what image springs to mind? Perhaps a young person in the workplace, being mentored by an experienced employee as they learn a new skill or trade? This exact picture has been found in countless government publications about apprenticeships in recent years. It is also, by and large, what the British public expect of an apprenticeship as they know what a fulfilling route to success it can be for young people entering the world of employment.

With this mental image of an apprenticeship in mind, voters will no doubt be pleased to hear politicians talking about record apprenticeship numbers as well as the Government’s target of getting 3 million people to start an apprenticeship between 2015 and 2020. It will therefore come as a great surprise to members of the public to learn what the Government now means when it talks about ‘apprenticeships’. As my new report shows, the apprenticeship brand has been stretched too far.

Since 2013 the Government has allowed employers to decide what counts as an ‘apprenticeship’. This sounds sensible enough, and indeed many employers have used this opportunity to design high-quality training programmes aimed at helping young people transition from education to work. However, other employers have taken a different approach. With hundreds of millions of pounds available in government subsidies for any training course that is labelled an ‘apprenticeship’, some employers have used this opportunity to rebadge an entirely inappropriate set of training courses as ‘apprenticeships’ when they are nothing of the sort.

This new report shows that the list of roles now counted as an ‘apprenticeship’ includes serving customers in a delicatessen or coffee shop, working on a hotel reception desk, performing basic office administration and serving food and drink in a restaurant. Such low-skill and often very short training courses do not meet either the historical or international definition of an apprenticeship.

The report has also found that employers are using the apprenticeship levy to rebadge leadership and management courses as ‘apprenticeships’ too. The list of the most popular apprenticeships designed by employers over the past few years includes becoming a ‘Team Leader’, ‘Supervisor’ or ‘Manager’. Cranfield University’s prestigious School of Management has even re-designated its existing Executive MBA as an apprenticeship. As a result, employers can claim a 90 per cent subsidy for each senior executive that enrols on the course instead of paying for it themselves (at a cost of £32,000).

The financial implications of this widespread rebadging and relabelling of courses are significant. Almost 40 per cent of the new apprenticeships designed by employers are merely ‘apprenticeships’ in name only. Our calculations show that £600 million pounds will be wasted each year on such courses. This will, in turn, lower the value and prestige of apprenticeships in the eyes of young people, parents and politicians.

To make matters worse, there is little doubt that Brexit will affect the UK labour market to some degree, making it even more important to up-skill the workforce. Nevertheless, on current trends the Government will be spending these huge sums on low-skill courses and management training for older and more experienced employees instead of investing in high-quality apprenticeships for young people at the very start of their career.

Serving customers in a restaurant is not an apprenticeship, nor is sending a Chief Executive on an MBA course. They never have been, and they never will be. What’s more, they are not what the public expect to see being associated with the apprenticeship brand. The Government is right to focus on apprenticeships, but this is the wrong way to go about it.

Tom Richmond, Senior Research Fellow, Reform

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