How can the UK’s apprenticeship system be improved?

Apprenticeships are intended to provide opportunities for young people as they move from education to working life. But the way things operate in the UK means that those who would most benefit are often missing out.

Apprenticeships have long been seen as great potential opportunities for young people as they make the transition from education to working life. There is a considerable body of research evidence on apprenticeships internationally, both in terms of how they are set up and their benefits (for example, Wolter and Ryan, 2011).

The combination of ‘off-the-job’ education (with learning providers) and ‘on-the-job’ training by employers can be very engaging for young people and beneficial for employers. Unfortunately, this is not how apprenticeships always work in England.

Increasingly, older workers have accounted for more and more apprenticeship starts – nearly half in 2022/23. The suspicion is that much of what is coming under this umbrella is continuous professional development that would previously have been financed by employers. This trend is encouraged by the way that the apprenticeship levy operates.

While some public subsidy for training older workers can be justified, there are other ways to do this, such as through human capital tax credits (that is, a subsidy through the tax system, similar to tax credits for firms’ spending on research and development). Apprenticeships are a more intensive form of training, best targeted at younger individuals who also show higher returns from engaging with them (McIntosh and Morris, 2018).

Some experts have made the case that there should be an ‘apprentice guarantee’ (Layard et al, 2023). This would mean extending the Robbins principle for higher education – that university courses should be 'available for all those who are qualified by ability and attainment to pursue them and who wish to do so' – to further education.

As explained in these experts’ report, which was part of the Economy 2030 enquiry, the implication is that anyone who qualifies for the next higher level can expect to find a place of some kind. The authors discuss what this would look like and how it could be funded. The plan would include ring-fencing a substantial part of the apprenticeship levy for younger people aged under 25 (Layard et al, 2023).

Young people who qualify for apprenticeships usually have lower academic pre-requisites than those considering university (see, for example, Cavaglia et al, 2017). Further, the notional educational level of apprenticeships is correspondingly lower (for example, mostly level two or three in England).

While it is a good thing to allow people to progress to higher levels of apprenticeship or educational qualifications, it is not realistic to think that most young people could go straight on to a degree apprenticeship after school (even if there were enough of these available).

What’s more, degree apprenticeships are not a vehicle for social mobility, improving the economic prospects of disadvantaged children relative to their parents. Indeed, they are more difficult to enter for disadvantaged young people than university (Cavaglia et al, 2022).

Some degree apprenticeships cost over £25,000 to deliver – much higher than earlier stage apprenticeships. It has been argued that one way to release more resources for other apprenticeships would be to fund degree apprenticeships out of the standard fees and loans model of higher education, rather than out of the apprenticeship levy (Willetts, 2023).

In recent years, there has been a decline in apprenticeship starts. But they are better quality that in previous years because of a series of policy reforms such as employer-led standards, a minimum length, a required amount of on-the-job training and more rigorous final assessment (see Cavaglia et al, 2022).

Figure 1: Apprenticeship starts and achievements

Source: GOV.UK

Another challenge of the funding mechanism (the apprenticeship levy) has been for small and medium-sized enterprises (SMEs) because the overall amount is capped and has at times led to rationing of support for SMEs (see Mansfield and Hirst, 2023).

Although apprenticeships can be beneficial for individuals and for firms, they are not all created equal. Even within the same level, there is huge variation in their returns according to sector (Cavaglia et al, 2020). For example, (at level three) returns are very high in engineering but relatively low in child development and wellbeing. A general pattern is that returns are higher in the sectors that are more popular with men.

Other challenges include high non-completion rates (see Cavaglia et al, 2022). In the UK, apprenticeships also have a rather narrow focus compared with how they operate in other countries.

This is reflected in the number of apprenticeship standards. For example, there are over 700 in England and only 342 recognised trades in Germany. Some of the UK ones are very niche – for example, an apprenticeship standard as an assistant puppet-maker. Apprenticeships should prepare someone for their whole career rather than for a very particular role.

There are big challenges in this area of education, as in every other.